Domestic prices of steel, of which India is among the three top global producers, are expected to climb 10-12 per cent this year, with the government’s measures to revamp infrastructure and consumption likely reviving demand for the alloy from carmakers and construction companies. In anticipation of a turnaround, steel shares have climbed 32-79 per cent from their October lows, in kilter with buoyant domestic and international prices of the commodity. The Centre’s decision to invest Rs 102 lakh crore in infrastructure projects over the next five years is expected to buoy steel demand, while a likely deal between the US and China on tariffs should ease global trade concerns on the primary infrastructure alloy. “The downward trend in steel prices should stop in 2020 and a gradual upward move has already started from the last week of December,” said Manoj Jain, head of commodities at IndiaNivesh Research. “Demand from the automobile and real estate sectors will also revive on the prospect of better domestic rabi crop production this year. We expect a 10-12 per cent upside move in steel prices in 2020.” Steel longs for February expiry were trading at Rs 32,020 per tonne on Thursday. Analysts said the price could increase to Rs 35,600 per tonne this year. In the physical market at Mandi Gobindgarh in Punjab, steel prices opened at Rs 32,400 a tonne and traded in the range of Rs 32,500- 32,600 a tonne on Thursday. Measures to revive consumption should boost physical demand, while investors should expect decent returns due to attractive valuations. Leading producers expect a northward trend in output and demand.
Source:https://economictimes.indiatimes.com/markets/commodities/news