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CMIE foresees a hike of 7.2% in steel prices this year

30 Jul 2012 Evaluate

The Centre for Monitoring Indian Economy (CMIE) has projected a rise in steel price by 7.2% this year due to constrained availability of raw materials and subdued demand, as the construction gathers pace after monsoon season. Albeit, the international prices of the alloy fell drastically due to unfavorable macro-economic environment.

Heavy demand from the user industries, firmness in domestic iron ore prices and a weaker rupee are the main causes of the price hike in domestic market. CIME expects that the price rise of iron might be at a modest pace during the July-September season as demand for steel usually weakens in monsoons.

It also expressed hopes that the supply of iron ore might improve with the starting of mining activity in Karnataka and expects 8.5% growth in finished steel production. Earlier in June, the finished steel prices had fallen by 0.5-1%, due to steep correction in international prices.

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