Indian steel prices have picked upward momentum and it is are expected to rise further in the coming weeks coupled with an uptick in infrastructure and automotive demand post monsoon and higher coking coal costs lifting production costs of mills. Market experts anticipate that steel prices will rise further on higher demand. However, the prices may probably stabilise a bit amid an uptick in imports from China and other countries.
“HRC prices have increased by Rs 4,000 PMT since July, and we anticipate a further increase of Rs. 2,500 - 3,500 PMT in the coming weeks. This price surge is not solely driven by rising coking coal costs or higher production costs. It is also fueled by a sharp spike in demand from the automotive and infrastructure sectors, along with aggressive restocking by retailers and traders post-monsoon,” said Mr Abhinandan Jain, Director and Group CEO of PSPL Group.
The simultaneous rise in both price and demand will significantly improve margins for steel mills and resellers. With demand from automotive, infrastructure, and construction equipment expected to grow in double digits MoM and YoY in Q3 and Q4, the focus should be on profit maximisation.
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What Should Be Focus Areas
As per Jain, India should prioritise securing steel supply by fixing prices and volumes with steel producers. In the current scenario, supply availability is a bigger constraint than price. Key focus areas should be inventory management, economies of scale in sales, and improving yield, productivity and cycle time; there should be no sales loss because of steel availability.
“We expect another price hike towards the end of 2026 and again in the New Year, considering planned shutdowns of large steel mills and sustained growth in end-consumer demand, the industry leader further added.
Steel Price Surge: Good News For Mills And A Concern For Consumers
Reuters, in its report on Tuesday, noted that higher prices could help mills recover margins squeezed by surging coking coal costs. However, the same will rise inputs cost for infrastructure, construction and auto companies.
Higher steel prices may help mills recover margins previously impacted by rising coking coal costs.
Infrastructure, construction, and automotive sectors are facing increased input costs due to the price surge.
Despite the upward trend, India, as the world's second-largest crude steel producer, saw a marginal reduction in HRC prices by 280 rupees per metric ton between June and July.
Role of Imports in Steel Prices
The Reuters report noted that rising imports, especially from China, could limit mills’ pricing power. Earlier, India imposed safeguard duties on some steel imports last year to curb the surge in imports. It also launched an anti-dumping investigation into HRC imports from China, Japan and Russia in June.
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Imports have risen despite the trade measures. India was a net importer of finished steel between April and July, with finished steel imports up 36.6 per cent from a year earlier, official data showed. Meanwhile, China accounts for 31 per cent of India’s imports, making it the largest supplier, according to Reuters.