Steel Prices Rise as Safeguard Duty and Export Demand Push Rates Higher
Domestic steel prices have started moving upward after remaining under pressure for most of calendar year 2025. The recent increase has been supported by the imposition of safeguard duty on imports, stronger export demand, and rising raw material costs, prompting steelmakers to raise prices. However, analysts remain cautious about the sustainability of the current uptrend.
Latest HRC Price Hike Signals Firming Trend
Steel producers recently announced another round of price increases, with several mills raising hot rolled coil (HRC) prices by ₹500–₹750 per tonne. This marked the second hike in the current month, and market participants expect other producers to follow suit in the coming days.
As a result, list prices of HRC have climbed by ₹3,000–₹5,250 per tonne since mid-December, reaching around ₹50,500–₹51,750 per tonne across major mills. At the trade level, distributor-to-dealer prices have increased by nearly ₹6,000 per tonne to approximately ₹52,000 per tonne.
Key Factors Driving Steel Prices Higher
Multiple structural and cost-related factors are contributing to the upward movement in steel prices:
- Safeguard duty support: Import curbs have reduced low-priced overseas supplies, improving pricing power for domestic producers.
- Higher input costs: Imported met coke prices have risen sharply, while rupee depreciation has further inflated costs.
- Tight availability: Certain long products are witnessing supply constraints, supporting overall steel prices.
- Improved exports: Strong overseas orders have helped absorb excess domestic capacity.
Industry executives believe the recent price rise could mark a turning point after a prolonged period of subdued pricing.
Export Momentum Provides Additional Support
Steel exports from India have seen a notable improvement, aided by advance buying from overseas markets. During April–November 2025, total steel exports, including stainless steel, rose 31% year-on-year to 5.77 million tonnes.
Finished flat steel exports to the European Union surged 45% year-on-year to 2.46 million tonnes during the same period. This growth was largely driven by pre-buying ahead of the phased implementation of carbon-related trade regulations in Europe.
For the full calendar year 2025, India’s steel exports stood at 8.48 million tonnes, while imports declined to 9.56 million tonnes, reflecting improved trade balance dynamics for the sector.
Can the Price Uptrend Sustain?
Despite the recent improvement, analysts warn that supply-side pressures could resurface. The domestic steel industry has added nearly 15 million tonnes of capacity over the past few quarters, with an additional 5 million tonnes expected by the end of FY26.
This rapid expansion created temporary oversupply and capped prices earlier. Looking ahead, demand is expected to improve in FY27, with incremental consumption projected at 11–12 million tonnes. With limited new capacity additions in early FY27, the impact of overcapacity on prices may gradually ease.
However, some analysts caution that commissioning of new blast furnaces and a potential slowdown in demand growth could limit further price increases. On a cumulative basis, flat steel HRC prices are expected to be only 1–2% higher in FY27 compared to FY26, while increased competition may push long steel prices lower by 3–5%.
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