Property Plus
Coimbatore
Steel prices likely to soften in future, say analysts
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 slows down during this period, resulting in less demand of the commodity, he pointed out.
Scrap prices
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 to cut 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. 25,000-26,000 a tonne level next month, after which the rates are likely to firm up.
Slowdown
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 as well as global level.
Speculative forces
“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,” Firoz opined.
He said, it will either remain in the same level or slacken a bit in the coming week.
Ingot
The wholesale ingot and scrap prices were down by Rs. 500 a tonne in the national capital today due to reduced demand from re-rolling steel units. — PTI
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