OUTLOOK-India steel futures may move higher on demand

MUMBAI, Oct 6 (Reuters) - Indian mild steel ingot futures may bounce back this week on expected strong demand growth fuelled by the country's large-scale infrastructure development, analysts said.

Demand is expected increase from this month onwards mainly from the construction sector said Vibhu Ratandhara, an analyst with Bonanza Commodity Brokers Pvt Ltd.

Steel production is expected to rise 6 percent in the year to March 2009 and demand is seen growing around 12 percent. India aims to raise production to 124 million tonnes by 2012 from 58.64 million tonnes currently. See [ID:nDEL47770]

In the five months to August steel production growth was 4.2 percent, below the 5.2 percent seen in 2007/08 and 12.8 percent in 2006/07, Steel Minister Ram Vilas Paswan told a consumer conference on Saturday.

India, the world's fifth largest steel producer, has kept a constant watch on steel and iron ore prices, occasionally indicating possible intervention in case of a spike.

Mild steel ingot futures <0#NST:> on NCDEX is the most traded product in the ferrous metal category in India.

Bonanza suggested trade would be in a range of 27,350 rupees and 28,100 rupees per tonne for the October contract NSTV8.

Another Mumbai-based brokerage suggested a range between 28,000 rupees and 27,250 rupees. (Reporting by Sourav Mishra; Editing by Harish Nambiar)