Steel ingots march ahead, ride high on construction boom
Steel ingots, a semi-finished steel product which is the raw material for rebars (TMT steel) mainly used in construction, have seen a jump in the price by Rs 300 per tonne in the last week in the futures market.
By Deepa Krishnan, TNN |
MUMBAI: Steel ingots, a semi-finished steel product which is the raw material for rebars (TMT steel) mainly used in construction, have seen a jump in the price by Rs 300 per tonne in the last week in the futures market. On NCDEX, the contract deliverable in April was up close to 2% at Rs 20,279 from Rs 20,026 per tonne on March 12.
According to N Ramesh Iyer, assistant vice-president, ferrous metals, NCDEX, the high demand for steel across the country for construction, general shortage of semi-finished steel products in the market coupled with tight supply in the international market has pushed up the price of steel ingot futures on NCDEX.
The open positions, indicating the interest generated in the commodity, have also doubled in the last week for the April contract to 16,760 tonnes, from 7,580 tonnes last Monday.
Besides construction companies who use rebars, the product is also used by manufacturers of steel products, furnaces and re-rollers.
JK Arora, MD of Supreme Group, an integrated manufacturer of steel said, “Internationally, the price of billets is up by $30-40 per tonne. The rollback hike in steel prices which was announced after the budget for both rebars and HR coils, has affected the sentiment of the market so prices have more scope to rise.” He said that there could be another rise of Rs 500 in the price of steel ingots. Steel manufacturers have raised the prices of billets and rebars by Rs 700-1,200 per tonne on March 1, which was completely rolled back, while a hike of Rs 1,200 to Rs 2,000 per tonne on HR coils was partially rolled back.
NCDEX has been in talks with construction companies to enlist their participation in steel futures. The exchange was also planning to launch contracts in TMT steel, which is the product manufactured from steel ingots. India is the only country where steel futures are currently traded. Steel contract was launched in March 2005, on NCDEX, but has become liquid only in the last six to eight months.
According to N Ramesh Iyer, assistant vice-president, ferrous metals, NCDEX, the high demand for steel across the country for construction, general shortage of semi-finished steel products in the market coupled with tight supply in the international market has pushed up the price of steel ingot futures on NCDEX.
The open positions, indicating the interest generated in the commodity, have also doubled in the last week for the April contract to 16,760 tonnes, from 7,580 tonnes last Monday.
Besides construction companies who use rebars, the product is also used by manufacturers of steel products, furnaces and re-rollers.
JK Arora, MD of Supreme Group, an integrated manufacturer of steel said, “Internationally, the price of billets is up by $30-40 per tonne. The rollback hike in steel prices which was announced after the budget for both rebars and HR coils, has affected the sentiment of the market so prices have more scope to rise.” He said that there could be another rise of Rs 500 in the price of steel ingots. Steel manufacturers have raised the prices of billets and rebars by Rs 700-1,200 per tonne on March 1, which was completely rolled back, while a hike of Rs 1,200 to Rs 2,000 per tonne on HR coils was partially rolled back.
NCDEX has been in talks with construction companies to enlist their participation in steel futures. The exchange was also planning to launch contracts in TMT steel, which is the product manufactured from steel ingots. India is the only country where steel futures are currently traded. Steel contract was launched in March 2005, on NCDEX, but has become liquid only in the last six to eight months.
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