PTI reported that steel prices in India are likely to decline in the coming months due to a reversal of the same factors that led to a sharp surge in recent months.
The report cited Dr AS Firoz chief economist of Joint Plant Committee and head of steel ministry’s economic research unit said that “Steel prices have reached their peak. I see potential weakening of the same, especially for long products from now on.”
Talking about HR coils, Dr Firoz said, “I expect prices of HR coils to fall from the current level of USD 750 per tonne to about USD 600 per tonne to USD 650 per tonne by November 2010”
Explaining the rationale for his forecast, Dr Firoz said “What one observes currently is a reversal of the factors that led to a surge in steel prices. For example, inventory liquidation over the coming period will replace rebuilding of stocks so far. There are new concerns in the global investment scenario, which may cause a disruption in the capital market, especially in the emerging economies, thereby reducing investment confidence. There has already been a fall in long products prices in the world market, although the prices of flat products have remained unchanged overall for the time being.
The prices of steel scrap and sponge iron have also slipped considerably. These are indications of a weakened steel market.”