Thursday, June 02,
M S Ingot prices across India are riding high on the back of strong sponge iron prices.
Ingot market has found the much needed relief in terms of pricing pressure that manufacturers were facing for the past few months. The prices of sponge iron have gone up by Rs 400/MT on an average. And this has tilted the balance in favor of furnace owners who now have a better bargaining power with rolling mills.
From the past few months, market players were complaining about low sales and inventory pile up. But Ingot prices at mandi Gobindgarh gained momentum on Thursday and prices touched the level of Rs 31700-31750/MT late in the evening session. However, the productions levels have not gone up. This was evident from the procurement pattern of the ingot manufacturers. The prices of scrap have not changed and are still ruling at Rs 27,000/MT with trades abysmally low. That would mean only one thing, that the Ingot manufacturers are pushing the inventories that was lying with them and are making handsome gains, and if the market holds up for a few more days the manufacturers will be able to pass off all the inventory before the advent of monsoons.
Even if a manufacturer decides to start procuring raw materials form the market at current prices the present ingot prices provide ample room to adjust for higher sponge prices. This would mean that as long as the prices for MS-Ingot hold above Rs 31,500/MT levels the manufacturers can afford to breathe easy.
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