JSL Stainless expects price hike in 5-7% range by yr-end

In an interview with CNBC-TV18, NC Mathur of JSL Stainless, spoke about the latest happenings in his company and sector.

Below is a verbatim transcript of Mathur's interview with CNBC-TV18's Reema Tendulkar and Ekta Batra. Also watch the accompanying video.

Q: We understand that your plant in Orissa is going to get operational ahead of schedule. In terms of your expansion when would phase one be completed?

A: Phase one is a capacity of 800 thousand tonne of stainless steel manufacturing which is equivalent to nearly 3 million tonne capacity of other carbon steel integrated plant. It will be commissioned by February-March 2011.

What we have in operation right now is a 250 megawatt of captive power plant, our own Ferro Chrome furnaces because Ferro Chrome is the most essential input for making stainless steel and Ferro Manganese furnace and 420 thousand tonne of coke oven batteries are also in operation.

Q: Can you expand on whether you all will be looking at any price hikes going forward at all in this fiscal?

A: We can't talk of the entire fiscal. Stainless steel has become more like a commodity and our prices are totally dependent on some of the key raw materials like nickel which is sometimes volatile.

It is traded on London Metal Exchange (LME). All our customers know what the movement is and it varies from as low as USD 18,000 to USD 25,000 within one year. We have to follow trends particularly of the price of nickel as it is the most expensive input in stainless steel.

In Europe they have what they call the alloy surcharge where they are compensated on a quarterly basis on a base price in alloy surcharge. In Indian and in Asia particularly it's a spot price. If the price of nickel or chromium goes up we have to increase our prices once a month or sometimes once in 15 days as well, if it is volatile. I don't expect the price movement to be more than plus minus 5% or 7% for the next three months.