Steel market movements in the last quarter of 2010 and over the last 6 weeks in 2011 have been of avid interest owing an uncanny flurry despite the seasonality and frugal demand. The uncharacteristic pattern of price movements arouses interest in dissecting figures to have an incisive view of the factors in the background.
Demand aside, the supply factors have been equally active in the frolic. The cost ingredients of iron ore, coking coal and coke etc have played a stellar role, whereas the demand factors primarily stock replenishment and speculation have played second fiddle.
The devastating deluge in Australian coal mines and severely scuttled supply of iron ore from India have been the prime movers behind the cost escalation. At the same time the market low on stocks which had not been replenished owing to prolonged dormancy and the triggering of speculation about price going out of bounds culminating in heightened buying gave a definite thrust to the sagging fortunes.
The factors enabled a climb of nearly USD 200 per tonne in HRC prices since October 2010 thrust by climb of USD 30 per tonne in iron ore and USD 115 per tonne in coke prices.
(Source: www.steelguru.com )