Govt pressure, global cues likely to bring down steel prices

Govt pressure, global cues likely to bring down steel prices
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First Published: Sun, May 25 2008. 01 52 PM IST
Updated: Sun, May 25 2008. 01 52 PM IST
PTI
New Delhi: Fears of more administrative steps by the government to control inflation and easing of global pressure are likely to soon bring down mild steel ingots prices from the present level of Rs29,000 per ton.
Easing of the domestic prices of ingot is expected to reflect in the futures market in the days to come, analysts said.
Last week, there was hardly any movement witnessed in the prices of mild steel ingots in the futures market, except on Friday when there was a sudden spurt in movement on expectations that the government would roll back the export duty imposed recently on the alloy, said analysts.
The prices of ingots for June contract on Friday closed at Rs31,140 per ton after trading at Rs29,000 per ton in the week. Similarly, in the July contract ingots closed at Rs31,350 per ton after rallying from Rs29,000 per ton level.
Independent Strategy Consultant in Steel and Natural Resources A S Firoz pointed out that the decision to roll back export duty on steel would have no major impact on its prices in the futures market.
“It is the demand and supply mechanism that determines the prices of steel,” he said, adding that the prices of the alloy remained high driven by global speculative forces, which is not sustainable and the overall prices of steel is likely to cool down.
Echoing the same view, Karvy Comtrade’s G Harish said steel would continue to remain under the government’s scanner and the companies may be forced to reduce the prices of the alloy to help contain the soaring inflation.
The approaching monsoon would also have an indirect effect on the prices of steel as the demand for the alloy usually goes down due to halt in construction activities during the season, Harish added.
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First Published: Sun, May 25 2008. 01 52 PM IST
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