After an ominous lull on Friday the decline picked up on Monday in Pencil Ingot price levels all over the country. As we have been maintaining the isolated sprint in input material price levels since 8th October was doomed since start unsupported by corresponding pick up on finished buying.

In usual speculative pattern furnace owners as well as retail tried to build up the momentum in anticipation of pick up in finished demand with the onset of post monsoon period. Typically a period of pick up in construction and economic activity demand for steel remains firm.

A spectacular rally upto INR 1800 per tonne was concerted effort by the furnace owners to give thrust to the finished market. However the finished market was unreactive and could not absorb the cost escalation by passing over the price hike to buyers.

Since the construction activity barely picked up in tight credit market backfiring was inevitable .

Pencil Ingot
 

Change is on 21st October 13 as compared to 18th October 13
Change in INR per tonne