Steel Futures Declined on Lacklustre Demand Outlook
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Update time : 2022-06-06 21:40:27
The steel futures prices on the National Commodity & Derivatives Exchange Limited (NCDEX) has recorded significant decline over the past four to six weeks. The prices of June delivery steel contracts retreated from the recent peak of around INR 61,000 per tonne to as low as INR 46,500-47,000 during the initial week of the month.
The recent government decision to waive off customs duty on import of steel making raw materials including coking coal and ferronickel has contributed to the fall in steel prices. In addition, the anticipated weak demand for steel on account of slowdown in infrastructure and construction sector activities due to monsoon season too has triggered significant decline in prices.
The overproduction of iron ore- the key ingredient of steel making too has ensured its availability at cheaper rates. For instance, the cumulative iron ore production by National Mineral Development Corporation (NMDC) totalled 3.2 million tonnes in Mat this year, which is significantly higher than the 2.8 million tonnes produced in May last year. Also, the cumulative production edged higher by 7.4% from 5.91 million tones in April-May '21 to 6.35 million tonnes
in the same two months this year.
