India steel futures may continue their winning streak in coming weeks on rising input costs and hopes of a demand revival from construction and automobiles sector, analysts said.

The most-traded January steel long contract NSTF0 on the National
Commodity and Derivatives Exchange (NCDEX) was flat at 27,290 rupees
per tonne at 5:30 p.m., after gaining 24 percent in December. “It is
just a start of a rally in steel driven by rising raw material costs
and demand, prices may jump to 28,500/30,000 rupees in the near-term,”
said Tejas Seth, senior analyst with SMC Comtrade.

Key raw materials iron ore and coking coal have risen 65-70 percent from their 2009 lows.

India’s economy grew an annual 7.9 percent in the September quarter,
much faster than expected, on government stimulus spending and a surge
in manufacturing, adding pressure on the central bank to lift interest
rates as inflation rises.

The Indian economy will expand 8 percent in 2010/11 after growing
between 7 and 7.5 percent in the current fiscal year to end-March, said
the prime minister’s economic adviser C. Rangarajan.

“Steel is looking bullish, one can buy steel at around 27,000 rupees,
with a target of 29,500 rupees, maintaining a stop loss of 27,300,”
said Parag Joshi, an analyst with Way 2 Wealth Securities.

Source: Reuters

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