In the second half of 2010, iron and steel industrial restructuring and production capacity will be accelerated. Recently, many steel mills have stopped production due to renovations, which is also a major factor pushing up steel price. Domestic steel price are on the rebound, and this round of rebounding appears to involve all steel products -- the most prominent being for deformed bars and high steel wire rods.
Steel Prices Chart
Steel Prices Index
The MEPS Global Steel Price has fallen in July for the second consecutive month. Market demand is likely to be flat in the third quarter. This weak demand is forcing steel price down as customers have little business to place. In addition, fiscal tightening in much of the western world and China is stifling consumption of steel for infrastructure projects. Higher steel price from increasing input costs were translated into a reduction in the rate of growth in steel production in the second half of this year. If local/national governments have limited budgets then higher steel price, as a result of increased input costs, lead to less demand for the product.
Trade in Steel Futures Prices on the first trading day of the week was largely muted as the market hovered around previous steel closing prices, but slightly above it. Steel prices seemed to be looking for fresh directional clues before it assumed a fresh path.
NCDEX Steel Prices most active June futures traded at Rs.31260 per tonne, up 10 points at 17.45 PM IST. Meanwhile, steel long futures for July traded at Rs.30940 per tonne, down 0.32 percent and August futures at Rs.30750 per tonne, down 0.82 percent.
Steel prices are, however, being downgraded in the international market. The steel market prices might turn its attention towards the move by Baosteel, the largest steel producer of China, in which they have reduced prices for all their major products, reflecting weak demand for the alloy. According to a report from Reuters, Bao steel prices for all its major products by CNY 100 to CNY 200. The report said that prices of hot rolled products will be cut by CNY 200 and cold rolled products by CNY 100.
Steel has such influence in the market that other steel makers in the country are expected to follow the example. The seasonal lull in steel market during the second quarter is also expected to cap gains in the market.