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Steel Prices May Not Soften In Short Term
Posted by Pradeep Sadanapalli | April 11, 2008 | 272 views
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Loading ...If you thought rising interest rates were the only impediment to your owning a home, here’s another one. Rising steel prices are pushing up the cost of construction and chances are, the hike will be passed on to you.
Take TMT bars for instance. Until two days ago, it used to cost Rs 40,000 to a tonne. It now costs Rs 41,000. Traders say the sharp upturn has caught them by surprise. Two weeks ago, prices of TMT bars had come down to by Rs 2,000-2,500 per tonne.
This was after the government, concerned over rising steel prices and the impact it could have on inflation intervened and asked manufacturers to hold prices. The most recent hike has partly neutered the impact of that intervention.
This price rise has also impacted branded TMT bars that bear the ISI mark.
A tonne of this grades steel was selling at Rs 44,000 a few days ago after the government intervened. It is now selling in the region of Rs 45-46,000 to the tonne.
Steel traders said prices fell not just because the government intervened; but because high steel prices had impacted demand for the product.
“Traders, however, continue to remain skeptical about prices easing,” said Dipen Agarwal, a steel analyst.
Praful Doshi, a former president of the steel chamber in Maharashtra said the government should have intervened earlier. He pointed out to the fact that in an unprecedented move, the National Mineral Development Corporation (NMDC), had hiked iron ore prices in October last year.
Iron ore is the key raw material used in steel. However, the government did not concede ground, he argued. The consequence of which is the fact that iron ore now costs Rs 6,200 to the tonne as against Rs 4,000 a couple of months ago.
MOVING NORTHWARD
Prices fell not just because the government intervened; but because high steel prices had impacted demand Traders, however, continue to remain skeptical about prices easing NMDC had hiked iron ore prices in October last year. Iron ore is the key raw material used in steel .
SOURCES:
Times Of India
Topics: Construction, Real Estate |
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