Mumbai: India steel futures may edge higher this week on the back of reviving demand and rising raw material costs, analysts said.
“There are plenty of factors acting in favour... recovering demand and rising cost of inputs,” said an analyst with a local commodity brokerage.
The most-active steel contract on the National Commodity Derivatives Exchange was trading 0.12% lower at Rs24,920 per tonne at 4:33 pm.
Finance minister Pranab Mukherjee in the federal Budget 2010 raised plan expenditure by 15% in 2010-11 and proposed to invest Rs1.73 trillion on infrastructure in 2010-11.
The steel sector is expected to grow 6-9% in 2010 on higher demand from the real estate, construction and automobile sectors, the finance ministry said in a report on Thursday. Coking coal and iron ore prices, key inputs in the alloy, have been on a rise, which could support the prices of the end-product.
JFE Holdings Inc, the world’s sixth-biggest steelmaker, said on Friday it has agreed with BHP Billiton to pay $200 per tonne for coking coal for April-June.
“There is a technical breakout in steel above Rs25,200, for a target of 26,200 and maintaining a stop loss of Rs24,800,” said Amrut Deshmukh, senior analyst with Way 2 Wealth Securities.