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Prices in the retail market for hot rolled coil have already gone up by almost Rs2,000 per tonne and analysts believe a price hike from April is imminent on account of excise duty hike and jump in raw material contract prices
Following in the footsteps of other mills, state-owned steel major Steel Authority of India (SAIL) on Wednesday hiked steel prices by up to Rs600 a tonne, effective from 1st March, on account of increase in excise duty.
According to a PTI report, SAIL chairman SK Roongta told reporters on the sidelines of an All India Induction Furnace Association meet that there would be a price increase of about Rs500 to Rs600 a tonne due to the excise duty hike and it would be effective from 1st March.
Partially rolling back the fiscal stimulus in the Budget, the government raised excise duty by 2%-10% across the board. To spur economic activities, the government had earlier initiated massive spending programmes and slashed duties from December 2008 in three stages following the global financial crisis that began in September in the same year.
Indian mills have increased domestic commercial hot rolled coil prices for April production on rising international prices and higher costs of production. Prices have risen by at least Rs1,000-Rs1,500 (about $21-$31) per tonne ex-mill to Rs30,500-Rs32,000 per tonne. Prices for end users are also rising because of an increase in excise duty, which has risen to 10% from 8%. While mills have yet to officially increase the price of cold rolled steel, basic prices, exclusive of taxes, have already risen by Rs1,000-Rs1,500 per tonne to Rs36,000-Rs36,500 per tonne.
The price hike from April is imminent on account of excise duty hike and jump in raw material contract prices for major players across the globe. Both iron ore and coking coal contracts for 2010 are expected at 35%-45% higher levels than last year, and this could push up the cost of production by about $75 per tonne of steel.
"We believe that companies like Tata Steel and SAIL will be the major beneficiaries of the price jump on account of their backward integration. Global steel demand scenario is also improving with strong last quarter growth in US and Japan. Overall, we remain bullish on the steel sector as a whole and we could see further hike in the next quarter," said Kisan Ratilal Choksey Shares and Securities Pvt Ltd in a research note.
On the demand side, improvement is being seen in developed economies particularly in the flat segment on account of pick up in automobile sales. However, long product demand still remains subdued as no major revival is seen in construction activities which are the major consumer of longs.
Enam Securities Pvt Ltd said, "We believe higher raw material spot prices could lead to an annual rise in FY11 contract prices (negotiations going on), which will support steel prices. However, we believe credit tightening in China is likely to put a brake on the substantial price hike in raw materials as well as steel.”
Echoing the same view, steel secretary Atul Chaturvedi also said that steel prices were set to go up. "They (steel prices) will go up now. You have to decide between inflation and recession. Companies have to earn money and this can be done either if raw material prices go down or steel prices go up," Mr Chaturvedi said.
When asked if the price rise was alarming, he said, "If we see steel prices in the last 30 months, the current scenario is not alarming."
Last week, BHP Billiton in its coking coal contract negotiations with Japanese steel makers pushed the April-June 2010 contract price by almost 55% over last year to $200 per tonne. This was a major shift for BHP from the earlier annual contract system to a quarterly system. But Japanese steel makers rejected the offer.
Similarly, huge disparity between spot and long-term contract prices is prompting large iron ore miners to shift away from annual contracts to shorter duration contracts.
With the delay in contractual negotiations, steel prices are likely to remain at higher levels in the near term.
The Customer Service Charter for Tata Indicom guarantees pre-determined levels of service and support and includes compensation clauses to pay back customers if the set service levels are not met
Telecommunications service provider Tata Teleservices Ltd (TTSL) on Wednesday said that it would compensate its subscribers if the company fails to meet the pre-determined levels of service standards, a move that would help retain customers and force competitors to respond.
The Customer Service Charter for Tata Indicom, the company said "guarantees pre-determined levels of service and support and includes compensation clauses to pay back customers if the set service levels are not met."
The initiative was announced to commemorate the 171st birth anniversary of Tata Group founder Sir Jamsetji Nusserwanji Tata, a visionary who sowed the seeds of industrialisation in India, it said in a release.
TTSL offers wide-ranging telecom services, including mobile (both GSM and CDMA based), landline and broadband services across the nation and is the fifth largest operator in the country with over 60 million mobile subscribers.
The service will be immediately available to Tata Indicom customers across all 20 telecom circles where the company operates.
Commenting on the new initiative, Anil Sardana, managing director of TTSL, said, "On the occasion of our group's founder's day, we pledge to give every customer his rightful due."
TTSL was the first operator to start per second pulse in mobile services and had set the trend for others.
The company's new initiative would also help it retain its subscribers after the Mobile Number Portability (MNP) is implemented, a service that enables users to change operators while retaining the number.
According to sources, at least 15%-20% of the subscribers with each operator are likely to make use of MNP once it becomes available.
The Customer Service Charter, a first-of-its-kind endeavour in the Indian telecom industry, is aimed at ensuring that customer service emerges as a key differentiator for telecom operators, TTSL said.
The charter focuses on several identified aspects of customer interaction, with the larger objective of creating world-class service standards and benchmarks.
The charter will fulfil customer commitments—five salient propositions have been identified by TTSL to begin with, and compensation clauses have been built in, wherein the company will pay back customers if pre-set service levels on the chosen parameters are not met.
The Customer Service Charter includes five customer commitments, namely the bill dispute commitment, the call drop commitment, the handset replacement commitment, the VAS commitment and the call-cack commitment.
The bill dispute commitment offers resolution of every bill dispute within three working days, failing which TTSL will compensate its customers with Rs25 for every additional day taken to resolve the complaint. Similarly, other commitments also carry compensation in case the services are not the same as guaranteed.
The use of larger vessels, construction of new ports, an increased focus on coastal shipping, inland transportation and government support are likely to drive demand for both capital and maintenance dredging
The Indian government's plan of constructing new ports and expanding existing ones to support an expected increase in traffic is likely to create a huge demand for capital and maintenance dredging in the country, a top government official has said.
"The use of larger vessels, construction of new ports, an increased focus on coastal shipping, inland transportation and government support are likely to drive the demand for both capital and maintenance dredging," Union shipping ministry's secretary, K Mohandas, told PTI on the sidelines of the SMP World Expo 2010, held in Mumbai on Wednesday.
Citing a report from the National Maritime Development Programme (NMDP), out of the total port development expenditure of Rs55,800 crore, the expenditure earmarked for the dredging of all major Indian ports by FY12 is estimated at Rs6,300 crore, he said.
Moreover, as the country is expected to become a trade hub going forward, an effective port infrastructure is likely to play a vital role in determining the volume of export-import trade, he said. "With India expected to emerge as a global trade hub over the next few years, an effective port infrastructure is vital to scale up the country's trade development," Mr Mohandas added.
The government's Sethusamudram Ship Channel project and its plan to develop coastal shipping and Inland Water Transport (IWT) are expected to open avenues for dredging in the country, he added.