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India Steel Prices Surge: Raw Materials & Duties Drive Rally
27 Feb
Summary
- Hot-rolled coil prices climbed to a two-year high of ₹54,000.
- Coking coal prices increased 30% year-on-year, impacting production costs.
- A 12% safeguard duty on imports has reduced foreign steel supply.
India's steel market has experienced a significant reversal, with hot-rolled coil (HRC) prices climbing to ₹54,000 per tonne, a two-year high. This rally is fueled by escalating raw material costs, notably a 30% year-on-year rise in coking coal prices, which constitute a substantial portion of production expenses.
The government's implementation of a 12% safeguard duty on HRC imports, set to increase over three years, has effectively deterred foreign competition. This policy, combined with rising international prices for imported steel, has made domestic supply more attractive.
Demand from the infrastructure and construction sectors has accelerated since December, indicating genuine end-user consumption. Analysts forecast an 8-9% year-on-year domestic steel volume growth through the fourth quarter of FY26.
Steel producers are witnessing improved financial performance, with EBITDA per tonne showing a significant uptick. The outlook for the Indian steel sector appears favorable, supported by sustained infrastructure development and domestic demand.
