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Long steel product market in India collapses without crutches

Steel News - Published on Wed, 19 Oct 2011

Last couple of days has been reversal of fortunes in the long product market in India with near collapse.

The last 3 weeks saw a meteoric ascendancy in prices of long product. Shortage of iron ore and power had ticked the market into a whirlwind. Albeit there was some speculative buying in September end with a tendency to hedge losses by piling inventory at stockiest and traders end.

However in the subsequent weeks the buying tapered off. Price escalation became primarily cost push and shortage driven. With the country reeling under severe power crisis when the coal major defaulted on delivery schedule and political agitation leading to complete halt of production at Singareni Coal fields in Andhra the market went in tizzy.

It is learnt that in the last couple of day’s power shortage has been abated with improved availability diffusing the shortage pressure.

Market unsupported by demand collapsed as the cost crutches were removed. Demand per se remains week with buying restricted to need based with no proclivity to store. Sparse new projects and rising cost of capital has clipped the wings. Typically it is a low consumption low activity syndrome. Ironically the inventory with the mills is low.

With RBI slated to hike the interest rate by another 25 basis points on 25th October turnaround seems unlikely.

Sponge Iron
Location Change
Kolkata-100
Raipur-500
Bellary-100
Raigarh-900
Rourkela300
Bangalore -90

Change is on Oct 18th as compared to 14th Oct 2011
In INR per tonne

Pencil Ingot
Location Change
Mumbai-500
Chennai0
Kolkata-454
Mandi-1500
Raipur-1000
Alang-1100
Kanpur0
Rudrapur0
Ahmedabad-200
Ghaziabad-1600
Muzzafarnagar-2357
Hyderabad0
Raigarh0
Durgapur-454
Nagpur-725
Jamshedpur-500
Jaipur-1000
Rourkela0
Bhiwari-1100
Ludhiana0

Change is on Oct 18th as compared to 14th Oct 2011
In INR per tonne

Rebar TMT/QST
LocationChange
Mumbai-574
Chennai-520
Kolkata0
Delhi1211
Mandi-731
Raipur0
Kanpur0
Rudrapur0
Ahmedabad-100
Hyderabad0
Indore500
Bangalore0
Ludhiana0

Change is on Oct 18th as compared to 14th Oct 2011
In INR per tonne

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Products covered
1. Input materials - Iron ore, scrap, sponge iron, pig iron pencil ingot, billets and blooms
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3. Flat products - Narrow plates, wide plates, HR, CR and galvanized
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(Sourced from www.steelprices-india.com)
Posted By : admin on Wed, 19 Oct 2011
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