Steel prices in India may go up for the third time in a month - a rare instance -as companies pass on the increase in iron ore rates.

The third hike may take place on March 1, sources told Moneycontrol. The increase will be of Rs 1,000 a ton, taking the total increase within a span of 30 days to Rs 2,750  a ton. The latest round will take price of hot rolled steel to Rs 44,200 a ton.

Hot rolled steel is the basic grade of the product.

"Such an increase had rarely happened, it hasn't taken place in the last eight years," an industry official said.

Prices were hiked, by Rs 750 a ton, for the first time in the first week of February. The second increase, of Rs 1,000 a ton, came in the third week of the month.

The latest increase in steel prices comes after three consecutive months of softening rates in India, and the world over. "Since November, prices had kind of crashed, especially because of the China factor," said an industry executive.

Demand in China, the world's largest steel market, has softened since November, even though production has also been cut.

But an accident in a Brazilian iron ore mine owned by Vale SA, the world's largest producer, pushed up prices of the raw material. According to reports, the accident in a dam will impact about 70 million tons of iron ore production.

This has led to an increase in steel prices in the global market.

The latest round of increase in steel prices, if it happens, may also be linked to iron ore rates, this time in the domestic market. State-owned miner NMDC on February 22, hike iron ore prices by Rs 400 a ton. A spokesperson of the largest iron ore miner in the country, confirmed the hike.

But the increase in steel prices may not be sustainable, say industry executives. "Demand is still soft," said an executive. Nevertheless, the hike will be good news for the steelmakers  - JSW SteelTata SteelSAIL and Essar Steel.