Steel Prices are expected to rise huge world-wide demand: Good afternoon to u all................... I am in dismay as to why the steel shares are going down when there is an impending news of price hike looming large through out the world, with Mittal Steel already hinting a price hike in August. This will be the major price hike after 2004. Indian Steel majors have already hiked their prices. Today Bhusan Steel came out with good results...more such results will boost the sentiment in the steel sector. China Control only 25 -30 % of the steel demand world-wide, so it is unnecessary to think too much about the Chinese impact. Meanwhile in a neighbouring Country called Vietnam the steel prices are surging. In India also after the monsoon the construction will take place in a big way and the demand for steel will continue to rise. Also the demand for the other metals especially Zinc will also rise, as we are in the commodity super cycle. Till is expected to continue till 2030. Besides Chinese steel is cheap and not up to the mark. Today NDTV was talking of Chinese export increasing which could depress steel market world wide, but what they failed to grasp is that World-wide demand for the metal is increasing especially in India where Commonwealth games are scheduled to be held with some years. Besides the government stress on highways will push the steel demand further. The Golden Quadrilateral project has already increased the demand for the construction materials. So I think it will be better if people keeps increasing their holding in the steel counters as they could start to rise any time from now. Do not look too much on the Sensex--if u find a stock of having good valuation please go ahead and buy. Sensex is only for the large caps and now the play will take place in the small and mid-caps, where a Major rally has never taken place for the last 6 to 8 months time. TISCO, Monnet Ispat, JSW Steel, National Steels, Kanishk Steel, Sujana Metal Products, Uttam Galva Steels, etc. are looking very attractive after huge correction. Also Gateway Distripark Ltd has come to my investment price of around Rs.173. More about stocks in the following mails... For more please visit my group--- http://finance.groups.yahoo.com/group/SumanSpeaks/ or http://www.pkblogs.com/sumanspeaks or http://www.sumanspeaks.blogspot.com/ using http://www.hide-ip-soft.com/download.htm by hiding IP address[ This site is free for 30 days and no need of thinking of the cost effect for the time being]. The last site is useful if one wants to hide his IP address for some security reasons. With the crude falling, the stock markets are expected to rebound within a short time. But much will be clear after the fed meeting today. Where the Chairman might give some direction of the interest rate movement. The following news item discusses the rise of steel in Vietnam. It gives the reason why the steel price is rising in such a way when it should actually fall. Steel prices on the rise: Why? VNECONOMY updated: 18/07/2006[ From Internet} Prices of construction steel are surging. The prices are between VND7,900 and VND8,100 per kg in the Northern region and VND8,200 and VND8,300 per kg in the Southern region, up by around VND150 per kg from those in May. Many believe that steel prices will hit VND10,000 per kg by October. According to Mr. Pham Chi Cuong, Chairman of the Vietnam Steel Association, the major reason for the price hikes are sharply growing import prices of steel ingots. Steel ingot prices have increased by $25 – 30 per ton over those in May. Steel scrap prices are going up also. Import prices of steel scrap are now $270 – 293 per ton. Steel prices rise more in the Southern region for demand there is higher than in the Northern part. Meanwhile, there are more producers in the Northern region. Moreover, contractors are speeding up construction progress for completion before raining season comes, pushing up demand for steel.However, the possibility of steel prices increasing to VND9,000 – 10,000 per kg is low for the following reasons: First, it is thought that the coming months are not good time for construction in the Northern region so demand for steel will not rise. Second, under the Ministry of Industry’s guidelines, the Steel Corporation has been raising production of both steel and ingots so as to be capable to stabilize the market. Third, China has a huge steel reserves. Once steel prices in Vietnam get higher, Chinese steel will be imported in large amount. And fourth, ASEAN + China came into effect in June 1, 2006 and ASEAN + South Korea will be effect as of October 1, 2006. Accordingly, duties on steel products will reduce, keeping prices from growing.The three big producers which represent 71% of the world’s steel production has set up alliance. Therefore, steel ingot prices will be changeable in medium and long term, especially as Vietnam steel imports 80% of its demand for steel ingots. Experts say, to stabilize the market, the Government needs to properly control inputs. Steel ingot projects should be pushed up to enhance competitiveness of domestic producers. Moreover, the industry should apply high technology to save costs.Best wishes, Suman Mukherjee India. http://finance.groups.yahoo.com/group/SumanSpeaks/ http://www.pkblogs.com/sumanspeaks