NEW DELHI (Commodity Online): Construction companies will have to cough up more for steel in the coming fiscal as steel prices in India are set to go up following a rise in input costs and demand for the commodity.

According to Tata Steel chief of procurement Amitabh Panda, cost of raw material, including iron ore and coking coal, is expected to go up by 25-30 per cent in the next financial year from the current level putting pressure on steel makers to pass on the burden to consumers.

Unlike the West, where steel demand is still recovering from the impact of the economic slowdown, in India, steel producers would be able to pass on the input cost pressure to the consumers as offtakes are steadily growing.

As a result, Indian steel producers have to price their products higher in the next fiscal. The rising raw material costs are of huge concern for bottomlines of domestic steel firms and the 8-9 per cent growth in steel consumption would help ease pressure on manufacturers’ margins.

Echoing similar views, SAIL General Manager (Materials Management) RN Rawat said coking coal contracted rate for the next fiscal may hover around $200 a tonne from $105 a tonne currently.

Raw material prices are going up. Even iron ore at present is priced at $100 a tonne. All this will lead to increase in steel prices, he added.

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