SteelMint in discussion with well known manufacturers, traders & construction sources assessed that market is expecting slight downfall in coming weeks.
Previous Year Trend
In Mar’12, Ingot prices in Raipur had declined by 2% (INR 600/MT) to about INR 33,000/MT compared to INR 33,600/MT offered in Feb’12. Whereas, Mandi Gobindgarh had gone up by INR 1,300/MT to about INR 36,300/MT for Mar’12 than INR 35,000/MT estimated in Feb’12.
The same trend was witnessed in 2013 as rates in Raipur were decreased by 2.4% (INR 700/MT) to about INR 28,400/MT in Mar’13 against INR 29,100/MT offered on 28 Feb, 2013. On the other hand, prices in Mandi were raised by INR 1,500/MT to about INR 32, 300/MT for Mar’13 than traded prices i.e. INR 31,800/MT in Feb’13.
Current View of Market Participants
Finish Long Production may drop: End of seasonal demand in finished steel (Re-bar & Structures) has resulted in low sales of Ingot/Billet pan India.
On the condition of anonymity a well known Re-bar manufacturer commented, “We are planning for production cut as sale of the material is down by 30-50 % in past few days. If we maintain the production of the material in same quantity, it will put selling pressure on us with surplus stock. On the other hand, increase of sales from this level is limited.
Liquidity Issue: Upcoming elections are holding the payment of government projects which have congested the coming projects. It is heard that the real state sector is facing tough time owing to liquidity crunch in the country. Liquidity crunch has also led to slowdown the construction activities leading to downfall in the purchase of finished steel.
Along with this, closing of the financial year also led to payment crisis as major payment routed to clear the outstanding bill & entry.
Upcoming Festival result to Transport Hindrance: Onset of Festival ‘Holi’ is a trigger behind price correction. With sales of material remaining dull from 7-10 days, purchase has remained to limited level.
Market may see a Sharp jump after Holi!
A broker based in Central India shared, “Due to the festival, transportation is expected to hamper. Market is expected to shot up before & after 2-4 days of the festival. Owing to transportation issue Re-bar manufacturers are likely to procure material (Ingot/Billet) in good quantity as they cannot halt the running of rolling mill as they have to stock raw material (Ingot/Billet) for it.”
Leave a Reply