Finance Minister Nirmala Sitharaman’s latest move to provide a ‘Special Window’ for completion of stalled housing projects has contributed to a spike in the steel prices in the Indian market. The steel long contract reached a maximum of Rs 28,520 at ICEX today, which was Rs 60 higher than the previous day close. Nirmala Sitharaman yesterday said this move will revive the demand of cement, iron, and steel, as they contribute to building infrastructure. The steel prices have been recovering in the last few trading sessions due to many global factors and fiscal stimulus provided by the Indian government.
The steel turnover -traded value of all contracts — has increased by 142 per cent from Rs 415.29 crore in September 2019 to Rs 591.96 crore in October 2019, at ICEX. In the last six trading sessions, steel prices moved up 9 per cent from Rs.26,090 per MT, as on 30 October 2019, to Rs 28,460 per MT, as on 6 November 2019.
“Prices also get support from US-China trade deal and upbeat Chinese manufacturing numbers released this week. Base metal prices at the London Metal exchange are also showing recovery from the last two weeks after the US Federal Reserve cut key interest by 25 basis points in the last week of October,” Manoj Jain, Director & Head of Commodity Research, India Nivesh, told Financial Express Online.
In India, steel prices are getting cushion from the government’s move to support domestic steel industries by not joining RCEP, and after the latest announcements by the Finance Minister to complete pending real estate projects, Manoj Jain added.
Experts also say that it is yet not clear about how the funds under the special window for housing will be utilised and thus the market is still behaving benign. Once it is clear in the market, the steel prices are further expected to jump.