Friday, January 07,
SteelMint Exclusive
Nothing seems to stop the march that Indian long steel product market has achieved in past few days. Prices are moving up sharply at almost all major mandis. And market players are expecting prices to remain at these levels at least for a short while.
Production capacity improves and raw material is expected to remain expensive
Production capacities which were earlier at 30-40% have now been scaled up to 70-80%. As a result the requirement of raw material has suddenly increased. But on the other hand, supply of raw material especially imported coal has been affected to a greater extent due to Floods in Australia. Therefore in a situation when demand for raw material has increased and supply remains limited, experts are of opinion that the current price levels may stay for a bit.
The steel making process normally takes over 15 days of time. So, with a sudden increment in production capacity and rise in raw material prices, manufacturers believe the upward rally in prices to sustain for next couple of weeks.
“Prices are high but we are still expecting improvements in finish volumes. Such levels may not be sustainable at current volumes”, said a trader based in Chennai.
South India is still not showcasing a very bold face when it comes to demand in the market. Raw material is witnessing thicker volumes but retail counters haven’t seen a big boost in the demand yet. With so much happening, traders do expect volumes to improve going forward.
Steel prices edge up sharply across India. As per our conversation with few manufacturers and traders based in Central India, it is reported that demand is good for finished steel and prices are likely to sustain and traders do not see immediate and sharp downfall.” Demand is good so is the volume, prices are unlikely to fall sharply in short term” said Mr. Agrawal, a steel trader based in Raipur (Chhattisgarh).
However, winter in India especially North has subdued the construction activities and thus limiting the retail demand. We advise people in the market to watch these movements more closely than ever and maintain a cautious approach.
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