MUMBAI (Commodity Online): NCDEX steel long has been on a constant downtrend after hitting a peak of around Rs 34000/tonne in early January. However, indications from China present a much better outlook over the next few months.
A latest report by MEPS forecast that Indian steel prices may rise in coming months on the back of increasing Chinese and international prices. “Stock levels (India) are low and some replenishment will be necessary in the short term. Quotations from Chinese exporters and international transaction values are forecast to rise, exerting upward pressure on domestic numbers”, it said in the forecast
Another factor that will influence prices is the price of Iron-ore. With Iron ore production cut due to Supreme Court order, the resulting short supply may cause Iron ore prices to rise thereby adding to the cost of steel production. And this may force steel producers to raise prices.
Another alternative is for Iron ore exports to slow down due to the increase in export duty. This is already evident in Orissa's exports, which tanked by almost 80% in January. Orissa is India's biggest producer and exporter of Iron ore. Now if the material intended for export comes to the local market, steel producers may enjoy lower prices.
