Steel yesterday
settled up by 0.28% at 46180 on low level buying after prices dropped amid
persistent concerns of poor demand in China, the world’s top consumer.
The country’s reopening from strict Covid lockdowns failed to trigger the economic
recovery expected by analysts and investors, underscored by a contraction in
manufacturing activity for April, a sharp decline in imports, and
slower-than-expected industrial production growth. Accounting for the
steel-intensive construction sector, property investment sank by 16.2% during
the period, extending evidence of low demand for new housing as property prices
dropped for a 12th consecutive month. According to a major industry
association, increased demand from the domestic construction, railway, and
capital goods sectors would drive India's steel consumption growth during the
current fiscal year to March 2024.
In 2023–2024, the demand for steel is predicted to increase to
128.9 million tonnes from 119.9 million tonnes, according to a statement from
the Indian Steel Association (ISA). India's robust economic expansion has
benefitted the steel industry, and sectors including the automobile and
consumer durables are anticipated to drive steel demand, according to ISA.
India is the second-largest producer of crude steel worldwide. China produced
92.64 million tonnes of crude steel in April, down 1.5% from a year earlier,
the statistics bureau said. The April volume was also lower than the 95.73
million tonnes produced in March, data from the National Bureau of Statistics
(NBS) showed. Global steel demand is expected to grow by 1.7% in 2024 following
a 2.3% rebound forecast for this year based on a recovery in manufacturing
activity, an executive from the World Steel Association (WSA) said.
Technically market is under short covering as the market has
witnessed a drop in open interest by -18.91% to settle at 1630 while prices are
up 130 rupees, now Steel is getting support at 46010 and below same could see a
test of 45840 levels, and resistance is now likely to be seen at 46340, a move
above could see prices testing 46500.