Limited raw material availability likely to hold semi finish prices. Improvements in prices are expected in the near future.
Lesser buying of finish steel pushes back Ingot prices in India by INR 200-400/MT. Traders expected increase in steel buying after Diwali, but market did not respond as per their expectations.
Low buying for finish steel is because of ongoing elections in major Indian states. All project works are at halt on account of elections. Also financial crisis in the country is building an extra pressure on industrialists.
According to market player’s Indian steel industry is facing a tough time. However, participants are not expecting further downtrend, as market is already at its bottom. Falling supply of Iron ore resulted in raw material shortage. While, weakened Rupee slashed Scrap imports and made it costlier.
Indian steel industry is already facing Scrap shortage; and with Rupee losing its strength against USD makes things more difficult for the Industry to afford imported Scrap.
Rupees has touched its 2 months low level today and opened at 63.90 per USD. In last 6 trading days Rupee has fallen by almost 3.50%.
Pellet manufacturers started exporting seeing the increased foreign currency over Indian Rupee could help gain profit realization. . Also, good demand from other countries supports the pellet export. While, industrialists are also expecting that if dollar continues to improve prices will move up further.
There is lesser possibility of sponge Iron’s price fall owing to limited production of Sponge Iron.
Around 60% of Sponge Iron producers have stopped production because of low Iron ore’s availability.
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