Last Updated : January 01, 2010 14:45
Steel may rise further on economic recovery
Global economic recovery is expected to lead to improvement in steel demand from key consuming industries like automotives and construction, supported by the ongoing impact of government stimulus spending and restocking of inventories.
The World Steel Association had forecasted that global steel demand is expected to increase 9.2% y-o-y to 1,206 MT in 2010. As approximately 98% of global iron ore demand comes from the steel industry, iron ore consumption and prices are set to benefit.
Although iron ore companies are expected to face strong pressure from Chinese steel producers during price negotiations, demand supply dynamics and the low base effect due to the 33% cut in 2009 point to a likely upward revision in annual contracted prices in 2010.
Steel industry is on a recovery path with demand rising from corners. China and India are the two main powers that push the steel demand across the world.
It is highly likely that the world will return to production growth over the next three months and most likely in the first quarter of 2010. Korean and Indian steel consumption demand has also been rising strongly.
Stainless steel demand is forecast to grow by 5.5% a year by 2020. As expected, lower levels of around Rs20900/Mt, have enticed buyers in to the counter leading it to gain appreciably last month.
The counter was able to stead forward in a steep manner after a breakout above Rs23500/Mt and the pennant formation depicted in the charts. MACD on Daily charts have given a crossover in positive territory indicating further upside in coming days, but price pattern indicates that, some profit booking might be witnessed at higher levels after it has been rising after days of continuous gains and drag it lower towards Rs24000/Mt.
But traders who missed out the recent rally are advised to build long positions at lower levels eyeing higher levels of around Rs29500/Mt in days to come.
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MCX ZINCMINI 30 April 2012
contract was trading at
Rs 101.85 , down Rs. -0.2 . What's your view on it?
