A whiff of fresh air has given the much shot after break in long product market in India. With peak of seasonality demand washed off in the economic turbulence in India and overseas market has gasping for breathing space.
Week 2 of New Year brought the positivism to the fore with a sizeable rally input and finished prices. Even though some overt factors were preparatory to enliven the market a burst in the very second week certainly came as pleasant surprise.
If the seeds were sown by 20% depreciation of INR and seasonal escalation shortage of scrap culminating in cost escalation the market blossomed with reduction in inflation creating speculative fervour of revival in the penultimate months of 2012. An expectancy of reduction in lending rate and the rush to complete yearly projects catalysed the market.
However despite modicum of optimism being generated a streak of diffidence pervaded all through. Despite a charge by the mills with INR 1000 per tonne hike in TMT prices in January creating halo of revival end user buying has not shown perceptible strength. An occasional blip in finished prices followed by equally piquant silence creates suspicion about the veracity of rally.
Undeniably pencil ingot prices have seen the maximum thrust being directly dependant on scrap prices and plagued with power crisis but the same is not replicated in TMT and WRC prices. The trend being highly skewed culminating in a bulge in between is a classic case of biting more than one can chew. Sponge iron prices too rallied handsomely being plagued by shortage and suction of surge in pencil ingot prices.
With the government still dithering on taking affirmative decision on opening the sluice of infrastructure projects and construction sector held in limbo over ambiguity on reduction in lending rate the worst seems to have only receded.
Re-rollers continue to sulk with reduced margins as the furnace owners pass over the onus on them but in the eventuality of construction segment remaining unresponsive leading to 10% to 15% depreciation in value a backlash might be in offing within a fortnight.
Sponge Iron
| Location | Change |
| Kolkata | 0 |
| Raipur | 1100 |
| Bellary | 800 |
| Raigarh | 700 |
| Rourkela | 1000 |
| Bangalore | 363 |
Change as on Jan 11th 2012 as compared to 6th Jan 2012
In INR per tonne
Pencil Ingot
| Location | Change |
| Mumbai | 300 |
| Chennai | 0 |
| Kolkata | 544 |
| Mandi | 600 |
| Raipur | 1700 |
| Alang | 900 |
| Kanpur | 0 |
| Rudrapur | 0 |
| Ahmedabad | 1000 |
| Ghaziabad | 300 |
| Muzzafarnagar | 272 |
| Hyderabad | 1200 |
| Raigarh | 1360 |
| Durgapur | 635 |
| Nagpur | 181 |
| Jamshedpur | 0 |
| Jaipur | 700 |
| Rourkela | 0 |
| Bhiwari | 0 |
| Ludhiana | 453 |
Change as on Jan 11th 2012 as compared to 6th Jan 2012
In INR per tonne
Rebar TMT/QST
| Location | Change |
| Mumbai | 344 |
| Chennai | 0 |
| Kolkata | 0 |
| Delhi | 661 |
| Mandi | 731 |
| Raipur | 0 |
| Kanpur | 0 |
| Rudrapur | 0 |
| Ahmedabad | 1400 |
| Hyderabad | 0 |
| Indore | 700 |
| Bangalore | 500 |
| Ludhiana | 209 |
| Muzaffarnagar | 0 |
Change as on Jan 11th 2012 as compared to 6th Jan 2012
In INR per tonne
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