Indian secondary steel sector input prices rally after cut in lending rates

Photo: Business Standard

Friday, 16 Jan 2015: Sentiment driven India’s input market for secondary steel sector saw some activity for a change after cut in lending rates by RBI by 25 basis points. 

Sponge iron prices gained INR 50 per tonne at Raigarh and INR 150 per tonne at Raipur & Rourkela on Thursday but remained unchanged at Bellary, Kolkata and Ludhiana 

Steel melting scrap prices also rallied at Hyderabad (+500), Kandla (+100), Kolkata (+200) and Mandi Gobindgarh (+150). 

In unison, benchmark pencil ingot prices at several locations – Durgapur (+150), Hyderabad (+400), Jaipur (+200), Kolkata (+140), Mandi Gobindgarh (+200), Muzzafarnagar (+350), Raigarh (+50) and Rourkela (+150)

Although the rate cut is not expected to have moving impact on the market demand, it certainly perked up the sagging sentiment. An anticipation of possible transactions borne out of more construction activity and demand for long products. 

Any remarkable change in demand and market sentiments is possible only after further investments happens in the construction and infrastructure sector which is likely to happen after more credit easing after the budget. 

The faint momentum is unlikely to sustain.

Courtesy: Steel Guru