SteelMint in discussion with manufacturers & suppliers of finish Long steel assessed that demand of steel products is in downtrend condition. In contrary, inventory of MS Ingot, Billet & Re-bar is low in the plants that may support prices to fall after a certain level.
Major factor of low inventory in plants is low production owing to unpicked demand of Re-bar & Structure from 20 May, 2014 onwards. Low construction at pan India continues to decline the prices of Iron & Steel products. As a result, manufacturers & dealers of semi finish & finished steel products are cautious to purchase the material and had cut their production.
Sponge Iron: High summer season also build pressure on Sponge manufacturers that continue to decline the offers of Sponge Iron & Sponge pellet by INR 100-300/MT day by day in Central & Eastern India during last week.
Karnataka (Bellary) is one of the big producers of Sponge iron among South market and also a big supplier of Sponge iron to nearby states. Offers for Sponge iron & Sponge pellet are slashed by INR 500-600/MT in Bellary. Manufacturers of Sponge iron based in Bellary added that in coming week, offers of Sponge likely to fall again as demand from nearby states not picking and upcoming monsoon will not raise the demand.
Outlook: Market players believe that stagnant demand situation may continue further while looking monsoon season. They further added, current prices are very low and from this situation, market likely to remain range bound by INR 200-500/MT. There is no expectation of major upside, whereas downside limited due to low inventory.
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