Indian mild steel ingot futures on the National Commodity and Derivatives Exchange are likely to trade sideways with a positive bias this week after markets fell nearly 10 percent last week, analysts said.
But most analysts have suggested selling at current levels on expectations steel companies would refrain from raising prices and curtail exports to boost supplies in the local market.
“The government does not directly control steel prices but it looks like it has managed to convince steel makers not to raise prices this month,” an analyst in Motilal Oswal Commodities Broker Pvt Ltd, said.
Prices may edge up a little this week but in the medium term the market looks bearish and anyone holding long position may exit at current levels, Prakash Prabhu, Ventura Commodities Pvt Ltd, said. On July 31, India’s steel minister Ram Vilas Paswan said he had asked steelmakers not to increase steel prices in the ‘national interest’.
India is battling 13-year high inflation and steel prices are a major contributor.
Steel firms were expected to raise prices when a three-month moratorium on price increases ended last week, but chose to hold price, the steel secretary said last week.
There can be minor rise in prices but in the medium term the market should ease, the Bonanza Commodity analyst said.
Mild steel ingot futures <0#NST:> on NCDEX is the most traded product in the ferrous metal category in India.
Official data showed India’s steel consumption rose 10.7 percent in 20O7/08, while output growth was slower at 5.1 percent and the gap was met through 7.18 million tonnes of imports