New freight rates in India to impact coal and steel prices
Indian sources report that the recent increase in rail
freight rates for cement, coal and steel may result in an increase in steel and cement prices.
With the recent hike in
freight rates, steel producers are expected to reflect the 7% increase for steel
freight rate and 7.7% for coal to their prices.
It is stated that cement prices will differ from region to region depending on the distance of the markets from the producer. The cement producers are also negatively affected by the coal
freight rate hike.
On the other hand, the steel
freight rate has been increased on the back of reclassification of
iron ore by railways. This reclassification caused an increase of Rupees 34 ($0.7) per ton, which corresponds to an increase of 7.4%. The recent increase in railway
freight rate on steel, which is 7%, is expected to result in an increase in steel prices since the producers will be in need of offsetting the rising cost by price hikes.