High input costs are likely to continue to yank steel prices in the domestic market further even as demand is expected to remain high, Tata Steel today said. The steel major said prices of the alloy will continue to show an upward trend in near future due to rise in cost of raw materials as its expenses on the raw material may go up by USD 1 billion in the current fiscal to USD 7 billion.  Due to the rise in input costs Tata Steel group said that its expenses on raw materials may cause a huge rise in the price of steel.

Tata Steel group director (procurement) Kees Gerretse said "Steel prices will continue to increase in the line of raw material cost. Flood in Australia and increased activity from china may cause the upward move in the prices.

Coking coal prices have shot up following the flood in the Australian state of Queensland, the country's largest coal producing province.

Kees said that there is a possibility of 15 percent further escalation on the cost of inputs with the prices of iron ore and coking coal going past USD 300 a tonne.

He was speaking to the media on the side lines of a conference ‘Procurement in Steel Industry Conference 2011’ in the national capital on Thursday

The Indian steel industry which is eyeing to reach a goal of 120 million tonne mark of crude steel capacity by 2012, is adopting collaborative best practices with their suppliers to optimize buying costs.

Viresh Oberoi, MD, mjunction who facilitated and organised the conference said, “With spiraling raw material prices leading to escalated production cost on one hand and the necessity to scale up net sales on the other, it is important that the steel industry will evaluate its current procurement strategies with utmost importance and actively consider adopting intelligent purchasing processes.”