The largest producer of the alloy in India, state run Steel Authority of India Ltd, has announced a rise in steel prices of Rs 500 per tonne for flat products.

"The price rise is in line with the market," said RK Singhal, SAIL spokesperson.

Analysts say the price rise was mainly due to very high input costs and increasing prices in the international market.

Other players in the industry like Tata Steel, Essar Steel, JSW Steel and Ispat Industries are also expected to follow SAIL in raising prices even as the steel ministry has been suggesting that the steel prices must be controlled in the country.

Flat products are mainly used in industries such as automobiles and consumer durables. The company on the other hand has not changed the price of long products which are used in the construction sector.

SAIL has earlier reported its profit for the quarter almost doubled with higher volumes due to demand from the automobile and construction sectors.

JSW Steel has also not raised the price of flat products but the company indicated that it will review prices in the next few days. Ispat Industries has decided to fix prices on the basis of different grades of the product. Prices of long products are currently ranging between Rs 27,000 to 29,000 per tonne, whereas prices of flat products are at around Rs 32,000 to 35,000 per tonne.

In the month of December many steel makers had raised prices by 3-5% due to good demand and stable international prices.