That`s a great piece of info
Generally things get repeated in India after a lag of around 2 months
Let me try to analyse the things loudly so that I come to know the lacuna in my thought process
When raw material prices appreciate , generally cos. like steel are able to pass on only a partial cost rise to some customers that too for a smaller production capacity as most producers have long term contracts with larger customers
Profitability suffers and is better to sell steel stocks dependent on external supply of ore and coke , specially buyers for spot ore
A negative for auto and white goods stocks
A positive for iron ore stocks as virtually their cost of production does not rise but spot prices go up
Long term contracts do not see any change
If the above situation gets replicated in India , what happens
1) Steel and Auto lobbies will pressurize FM
2) FM will threaten ore exporters
3) A negative for Housing Contruction cos. and white goods
Even assuming CHINESE NEWS is correct , my conclusion is that Steel is not worth to pick up and neither is Ore
I see potential in consumer spending - the king that he is
The Indian Consumer after a subdued wait has started flexing his financial muscle again
Time is better ahead for Retail domestic consumption stories again
Crux of the matter
Which stocks to buy -- somebody please suggest me
SM
--- In sharetrading@
>
> China Knowledge quoted an insider from a large Chinese steel company said
> there will be a significant increase in steel prices in the next few months
> as Chinese steel mills could see a surge of 70% or more in the prices of raw
> materials.
>
> The insider said that China iron ore contract price talks with the world's
> leading suppliers have entered the final stage and that the suppliers have
> asked an increase of between 70% and 80% in the price of iron ore and an
> increase of between 80% and 100% in the price of coke.
>
> According to statistics released by the General Administration of Customs
> earlier the average price of imported iron ore was USD 79.8 per tonne in
> 2009 down by 42%YoY and the value of imported iron ore was USD 50.51 billion
> in total last year.
>
> The country imported 627.78 million tonnes of iron ore last year 41.6% more
> than the 443.45 million tonnes it imported in 2008 due to increasing demand
> for the mineral.
>
Happy Trading,
United we grow!!!
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