Friday, September 24,
SteelMint Exclusive
Steel analysts believe that slight improvement in steel demand will shoot up steel prices. According to them most of the steel plants based in India are running at 40-50% capacity or low, primarily due to poor demand and high input cost such as Iron ore, Scrap and Coal.
Steel demand has been sluggish for past few months which has forced steel mills to reduce their production capacity. “We have cut our production by at least 50% due to poor demand, high raw material cost; above all that global factors are also not encouraging. This year monsoon in India has started late, which has hampered construction activities” said one of the steel mill owner based in Eastern part of India.
We analyzed that there is no over production in the market, steel mills are running hand to mouth. Most of the mills are running only on one shift. Moreover prices of iron ore don’t seem to go down in near future which will result in high sponge iron prices.
So, a slight demand will certainly shoot up steel prices. Question to be answered is how long will it take to find this spark?
Leave a Reply