Domestic steel prices have seen an increase over the past couple of months in anticipation of a safeguard duty, but a looming global trade war is likely to weigh as threat of import rises and prospect of export flounders. Data from BigMint showed that in March 2025, hot rolled coil (HRC) prices ex-Mumbai increased by Rs 600 per tonne month-on-month (M-o-M), rising from Rs 48,400 per tonne in February to Rs 49,000 per tonne.
Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases. "In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks. In India, domestic fundamentals such as steel consumption remain robust, hence one can take fresh positions in these counters," said Amit Dixit, an analyst at ICICI Securities.
Stocks of Indian steel companies are reeling from pricing pressure that is partly blamed on cheap imports. The stocks have declined up to 9 per cent on the NSE in one month, likely allowing investors an opportunity to use the correction to enter the pack as pricing pressure eases. "In steel or any other commodity, if prices or spreads are nearing their bottom, it can be an opportune time to invest in those stocks.
Steel companies are witnessing margin pressures in Q2FY25 and this may persist until China sees growth recovery.
Analysts are advising a cautious stance on the steel sector due to a combination of factors. The major one is that China has maintained momentum on steel exports in CY24 and there could also be domestic over-supply in the medium-term. Trade data for Jan-Feb'24 shows that China's finished steel exports rose 31 per cent year-on-year (Y-o-Y) to 15.9 MT.
Raw material prices had been on the rise, but since Russia waged war on Ukraine, prices have surged.
Strong demand in the domestic market, coupled with an increase in raw material prices, is pushing up steel prices. According to SteelMint, a market intelligence and price reporting firm, the list price of flat steel has seen an increase of Rs 750-2,000 per tonne for October deliveries. The long steel price witnessed an increase of Rs 1,500 per tonne towards the end of September.
The festive season will mean business for the steel industry as it is the time when automotive and consumer appliance companies bump up demand to prepare for higher sales, experts have said. Ranjan Dhar, chief marketing officer at ArcelorMittal Nippon Steel India (AM/NS India), said that bookings by auto and consumer appliance industries are 20 per cent higher ahead of the festive season compared to last year. "While this could be for a couple of months, it could normalise later at approximately 10 per cent," he said.
Given wild swings, investors are wondering where the metal market is going. There was a strong uptrend in industrial metal through much of the last three years due to fears of supply chain issues - first due to Covid-19 and then due to the Ukraine War. That uptrend broke down as it became apparent that global growth would moderate as inflation rose and Western Europe (the EU plus the UK) went into a near-recession and China was in a rolling lockdown.
Corrosion is a big menace for anything with steel application from rebars in construction, oil and water pipelines, railway track, power distribution poles to automobiles, says Kunal Bose.
Tata Steel has increased spot prices Rs 300 to Rs 500 a tonne on some long products, while public sector steel producer RINL has increased rebar prices by Rs 500 to Rs 1,000 a tonne. Rebars, which are also long products, are currently ruling at Rs 32,000-33,000 a tonne. C G Patil, director (commercial), RINL, said this was the first increase since July-August, when prices started dropping. The increase was on the back of lower production owing to power cuts.
Russia's war on Ukraine has sent steel prices soaring to its highest levels in the domestic market since November 2021. But there is little cheer in the industry. That's because input costs are spiralling out of control, leaving the big boys nearly as high and dry as the small, medium and secondary steel producers. Russia and Ukraine are major providers of steel and raw materials to the world.
A primary producer said that the prices would be raised in tranches this month and the total increase could be Rs 6,000 a tonne.
Positive cues from China - which accounts for 56.5 per cent of global crude steel production - are likely to keep demand-supply in balance and provide support to prices. All eyes have been on China, which opened after New Year holidays, as it was widely expected that prices would recover post-holidays after the weakness in January. Jayanta Roy, senior vice president, ICRA pointed out, barring last year when Covid-related restrictions affected China's steel demand in February 2020, historical trends show a typical upward movement in steel prices post-new year festivities. China's opening post-holidays was keenly awaited, especially in the wake of the sluggishness in the market in January.
The escalating trade war between China and the US could be an opportunity for India.
It's Donald Trump like he's never been seen before.
Consequences of China's efforts to stabilise its equity markets after three weeks of declines, which wiped out some 30 per cent of the value is far more importance to the world, says Clyde Russell.
Indices reversed all its losses during late trades.
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