India steel futures may extend losses for a second straight week weighed by seasonal slackness in demand, and falling input costs, analysts said.
The most-active August long steel contract was trading 0.25 percent lower at 23,540 rupees per tonne at 5:34 p.m., after losing 1.3 percent last week.
Prices have fallen by more than 20 percent since April triggered by destocking, from its 18-month high of 29,650 rupees.
Industry has been struggling with rising steel imports at lower prices especially from China.
“The bias is on the negative side on weak demand, range seen is 22,800-24,100 rupees,” said Tejas Seth, senior analyst with SMC Comtrade in Delhi.
The onset of monsoon typically results in restricted demand for the alloy from the construction sector.
Iron ore, a key input in the alloy, in Asia fell 7 percent from a week ago, and traders said a further decline could be expected, with Chinese steel mills indicating a cut in production.
Iron ore prices in Asia have fallen about 33 percent since the end of April when they gave up a climb towards $200 as demand from China, the world’s largest steelmaker, weakened. Global steel prices may jump by half in 2010/11 as new capacity additions get delayed while raw material costs surge, head of research at Crisil, a unit of Standard & Poor’s, said in an interview.
India’s steel output in the 2009/10 financial year that ended in March was at 59.58 million tonnes, up 4.23 percent from 57.16 million tonnes produced a year ago.
Source: Reuters
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