Thursday, October 28,
SteelMint Exclusive
India Long product market hoped to make a comeback in the beginning of October with a price hike of Rs1000-1500/MT. But all hopes were shattered as market failed to absorb such price hikes and demand remained perennially low.
Market yesterday noticed a sharp fall and looked deserted with buyers almost nil. Market participants claimed for fewer enquiries yet sales remained low.
Manufacturers claim that, the tightening of credit along with shortage of labour are few reasons behind the current down fall apart from the obvious reason of festive season.Most of them feel that liquidity remains a major problem.
Key factors affecting liquidity in the market :
1) High Input Cost
2) High Lead Time
3) High Conversion Cost and thin profit margins
4) Weak demand
“We need funds to keep our production intact. High input cost, high work in progress ;leaves us with no other option but to cut prices and get the funds” said Re-bar manufacturer based in Raipur, Chhattisgarh.
The intensity of the downfall has left market players in havoc. And it would not be surprising if prices go down further.
So for now, it would be advisable to wait and see until market exhibits a sustainable positive outlook.
Reported by Monica Patnaik (monica.patnaik@steelmint.com)
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