The long product prices continued its onward journey last week. Prices of various input materials as well as finished long products have surged by almost 10% since December beginning. This is a repeat of December 2009 to some extant, when prices had surged abnormally, by almost 23%, only to correct in January.
The fear of paying higher prices in January 2011 among buyers and stockiest led to releasing their demand for January also thus creating a sever push on supply side, which led to this surge
While some of the Indian steel majors have hiked their prices of long products in last 15 days, further hike is expected on week opening to catch up with market prices.
But correction in prices of long products market in India which is saddled by huge over capacity is just a matter of time and it would be interesting to watch when the correction starts
The flat steel product market has been the happening place over the last week. The spark was provided by the mid month price correction by INR 500 per tonne to INR 750 per tonne in anticipation of firming sentiments in domestic market and an attempt to bridge the gap between import offers and domestic levels.
However this booster had at the best dripping effect immediately. In the last 1 week the sudden spurt in buying has more of a speculative tenor as the stockiest and traders make beeline to pile stock before an inevitable price hike in January by the steel majors. It is prevalently anticipated that the prices of flat products will go up by at least INR 500 per tonne to INR 1000 per tonne come January.
But the moorings are favorable for at least January as the international prices have remained firm. Moreover the consumption from the white good segment will pick up soon as manufacturing and stocking picks up as a prelude of summer just before the budget.