Steel Long on NCDEX reaches at peak putting market players in a wait and trade mode

Wednesday, June 08 

SteelMint Exclusive,

Steel Long futures contract on NCDEX witnessed a phenomenal rise yesterday with June contract reaching as high as Rs 31,320/MT.

 Volumes on futures trade also increased sharply to touch 32,640 MT i.e. up by 23,520 MT from the previous week.  

 The recovery in steel longs prices reflected an unusual trend as construction activity generally slows during the monsoon season. But the wide gap between spot price & future price provided arbitrage opportunities for inventors and traders. And volumes picked up sharply for steel futures on NCDEX.

However, physical market showed a mixed trend with prices going down at mandis’ especially in South & West. MS Ingot in Hyderabad went down by Rs 550/MT and this made Ingot manufacturers in Raipur to go for a competitive pricing and there was no hike in prices.

The price rally seen in the futures market yesterday might lift the market sentiments slightly but it has made market players cautious and has put them in a wait and trade mode. While the market participants at NCDEX still see the prices inching a little higher.

The recent spike up on the futures market if sustains can provide a big relief to Ingot manufacturers as the futures and spot are at parity now and it will provide an opportunity for plant owners to increase production level and sell the produce at the exchange.