The lagging effect in Steel Long October contract on NCDEX
has made buyers cautious. Prices for the October 11 contract have went down
sharply to reach as low as Rs 29,530/MT on Monday. Whereas, the November' 11 contract traded between Rs 31,700- 31,900/MT i.e. moreover same as the previous close.
The spread between the October and November futures contract
have widened from difference of Rs 750/MT to as high as Rs 2,050/MT.
The major reason for the lagging effect is attributed to the
FED (Final expiry Date) for the futures contract on NCDEX. Around 7,200 MT of
steel Ingot has been found accumulated over a period since 2005
when NCDEX launched trading of Steel Long.
The amount that has been accumulated cannot be rolled over
further to the November contract. So, as a result buyers are afraid of taking
any position and are shying away from the market, said an official of NCDEX.
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