Steel futures seen trading in tight range

Steel futures seen trading in tight range

Mumbai: India’s mild steel ingots futures are expected to trade within a narrow range this week, which ushers in the New Year, with traders awaiting a second stimulus package from the government for fresh cues, analysts said.

“Trading (in steel ingots) would be range-bound due to year-end," said an analyst at SMC Global Securities Ltd in Delhi. Analysts said the second stimulus package may provide some short-term boost to sentiment, but may not be successful in reviving sagging domestic demand.

India is considering another stimulus package to lift slowing growth, which may include steps to ease liquidity and relief measures for export and housing sectors, the trade minister said.

The stimulus package may provide some temporary support to prices, but it will all depend upon how effective these measures would be over the medium-term, said Vibhu Ratandhara, an analyst at Bonanza Commodities.

Mild steel ingots (January contract) may move in the range of Rs22,300-23,350 for the week, he added.

Indian state-run banks earlier this month decided to lower interest rates on some loans to home buyers and small businesses as part of a government initiative to spur demand amid a global crisis.

The banks will offer interest rates of 8.5% on new home loans of up to Rs500,000 and 9.25% for loans of Rs500,000 to Rs20 lakh, said O.P. Bhatt, chairman of State Bank of India, India’s biggest bank.

Further, the government had also unveiled a slew of measures, including a 4% cut on excise duty on steel and its products.

At 1.12pm, the benchmark mild steel ingot January contract on Tuesday traded steady at Rs23,140 per tonne. If the prices close below Rs22,300, then it may further move down to Rs21,450, Ratandhara added.