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Steel prices may soften up
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The Government is likely to put pressure on steel companies to contain prices
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Steel prices may further soften due to the government putting pressure on companies to contain the commodity’s rates to tame inflation and the slackness in construction activities on the onset of monsoon, say analysts.
As the inflation rose to near 44-month high of 7.83 per cent for the week ended May 3, the government is likely to put more pressure on steel companies to contain the rising prices, Karvy Comtrade’s G Harish said.
The arrival of monsoon will also contribute towards slackening of steel prices as construction works slow down during this period, resulting in less demand for the commodity, he pointed out.
The wholesale ingot and scrap prices have fallen by up to Rs 500 a tonne in the national capital last week due to cautious approach by buyers after secondary steel producers announced cut in prices on all flat products by about Rs 4,000 a tonne. In the futures markets, Harish said, steel prices are expected to trade between Rs 25,000 and 26,000 a tonne level next month, after which the rates are likely to firm up.
However, independent Strategy Consultant in Steel and Natural Resources A S Firoz hopes that steel prices will cool down in another 2-3 months as there is a slowdown in infrastructure projects in domestic and global level.
“The steel prices are artificially maintained by speculative forces and cannot continue to trade in the same level as the global demand for the commodity is weakening,” Mr. Firoz said. He said it would either remain at the same level or slacken a bit in the coming week.
The wholesale ingot and scrap prices were down by Rs 500 per tonne in the national capital today due to reduced demand from re-rolling steel units. - PTI
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