Mandi Govindgarh, Punjab is considered as the bench mark for steel ingot prices, which is produced by secondary steel producers and accounts for significant share in Indian steel production.
With state of Punjab being hit by power crisis and severe government measures have made steel prices swing in both ways.
Market buyers and sellers are very cautious on sudden hike in prices. Market participants report in Mandi Govindgarh that price hike was on account of new system of e-billing (which will change the way scrap used to be traded) and not due to improvement in finish steel demand. Therefore market does not seem to have support level at these prices.
If we consider steel prices and demand in other states of India say Chattisgarh , U.P., Bengal, Odisha, Maharashtra and Assam, there is no significant rise in prices and demand.Market players say such high volatility in prices will make Mandi lose its charm.
Matter of fact is that steel production level has come down across India significantly. There are very few states which are dependent on Mandi Govindgarh and it will make less sense to consider Mandi as the benchmark.
” We hardly supply any material to Mandi Govindgarh, though our markets are very sensitive to steel prices at Mandi.We feel in coming time people will stop following Mandi as volatility is very high.” said a steel plant based in Mumbai, Maharastra.
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