Indian Steel Prices Set To Rise Further As Coal Costs, Demand Strengthen

Indian steel prices are expected to rise further in the coming weeks as coking coal costs increase, post monsoon demand strengthens and domestic steel availability remains tight. The price gains could help mills recover margins, but rising imports may limit their pricing power.

Hot rolled coil (HRC) prices have already surged. BigMint said its India steel composite index rose 2.8 per cent week on week as of September 4, marking its seventh consecutive weekly increase. Domestic HRC prices have reached a four year high, with the benchmark at around Rs 62,000 per tonne.

HRC prices increased by about Rs 4,000 per tonne between August and early September, following a marginal decline during June and July. Vedant Goel, director at Enlight Metals, expects prices to rise by another Rs 3,500 per tonne in the coming weeks.

Higher premium coking coal prices, which have reached a 2.5 year high, are adding to steelmakers’ replacement costs. Mills have been passing part of these higher raw material costs on to customers.

Demand is also improving as the monsoon season ends. Infrastructure projects, construction activity, automotive demand, festive buying and distributor restocking are expected to support steel consumption. Planned maintenance shutdowns at major mills, tighter spot availability and low distributor inventories are further supporting prices.

Government data shows finished steel consumption rose 7.9 per cent to 56 million tonnes during April July 2026. July consumption alone increased 6.8 per cent year on year to 14.4 million tonnes.

Despite the bullish outlook, rising imports remain a major risk for domestic producers. Finished steel imports jumped 36.6 per cent year on year to 2.77 million tonnes during April July, making India a net importer in volume terms. Imports by value rose 43.1 per cent to Rs 28,330.8 crore.

China was India’s largest supplier, accounting for 30.9 per cent of finished steel imports, followed closely by South Korea at 30.2 per cent and Japan at 14.9 per cent. Hot rolled coil and strip accounted for 36.7 per cent of imports.

India has already imposed a safeguard duty on certain steel imports and is investigating alleged dumping of hot rolled flat steel from China, Japan and Russia. The anti dumping investigation was initiated in June and remains ongoing.

Fitch Ratings has warned that stronger import competition could put pressure on steelmakers’ margins. For now, however, the combination of higher coal costs, stronger seasonal demand and tighter domestic supply is expected to keep Indian steel prices on an upward trajectory.