The mystery of pencil ingot prices deepened on Friday when it exhibited an uncanny resilience on day marred by hike in lending rate by RBI to rein inflation. Typically such a move is morale buster having a deflationary impact but a contrary move defies logic.
Market had been agog with expectation of hike in lending rate for some time however with spiraling inflation touching 9.78 % in July the fear of major hike in repo rate seemed distinct.
With a 25 basis point increase in repo rate and reverse repo rate market took it positively with signs of RBI hawkishness ebbing in the coming days. As monsoon recedes and seasonal demand expected to unfold soon pencil ingot prices erred on the plus side.
Reading between the lines the RBI declaration had underpinnings of another round of interest hike before the culmination of Q3 as the inflation figure is nowhere near the targeted 6-6.5%.
Prudence and wisdom indicates caution rather than optimism. The only reprieve for long market in heavy infrastructural investment and growth seemingly out of vicinity the hike can be yet another round of speculative rumblings bound to perish with the same alacrity.
Ever increasing cost of capital and the ensuing liquidity crunch one cannot help being optimistic. Finished steel TMT bars and structural remained unresponsive to the eccentricity of input market.
Sponge Iron
| Location | Change |
| Kolkata | 200 |
| Raipur | 500 |
| Bellary | -200 |
| Raigarh | 300 |
| Rourkela | 200 |
| Bangalore | 0 |
Change is on 16th September as compared to 15th September 2011
Change is in INR per tonne
Pencil Ingot
| Chennai | Change |
| Mumbai | 300 |
| Chennai | 0 |
| Kolkata | 181 |
| Mandi | 50 |
| Raipur | 200 |
| Alang | 200 |
| Kanpur | 0 |
| Rudrapur | 0 |
| Ahmedabad | 0 |
| Ghaziabad | 200 |
| Muzzafarnagar | 227 |
| Hyderabad | 900 |
| Raigarh | 200 |
| Durgapur | 91 |
| Nagpur | 181 |
| Jamshedpur | 300 |
| Jaipur | 200 |
| Rourkela | 0 |
| Bhiwari | 200 |
| Ludhiana | 181 |
Change is on 16th September as compared to 15th September 2011
Change is in INR per tonne
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