CHENNAI: Steel prices are likely to rise by another Rs 2,000 per tonne over the next 10 days, driven by higher raw material costs and a pick-up in demand, industry executives said.
Hot rolled coil (HRC) and cold rolled coil (CRC) prices are expected to see a further increase as demand has strengthened across infrastructure, automobile and consumer durables sectors.
Steel prices rose by around Rs 4,000 per tonne between August and early September, reaching a four-year high. By late September, HRC was trading at around Rs 64,000 per tonne, while CRC prices were broadly moving in line with HRC.
Vedant Goel, MD, Enlight Metals, said the steel market did not witness a significant price increase during the first three months of the West Asia war as manufacturers typically maintain inventories of around 90 days.
“However, post-monsoon infrastructure activity and increased steel requirements from automobile and appliance manufacturers ahead of the festive season have triggered a surge in demand,” he said.
The rise in coking coal and other raw material costs has also contributed to the increase in steel prices, Goel added.
Vinayak Vipul, Partner, Mining & Metals, EY-Parthenon India, said Indian steelmakers using the blast furnace-basic oxygen furnace (BF-BOF) route are particularly affected by higher coking coal prices.
“Over the last few months, prices of coking coal, particularly hard coking coal sourced from Australia, have risen by 22%, which has had a significant impact on steel prices. HRC prices have risen by over 8-10% over the last two months, while CRC prices have increased by 11-12%,” he said.
Government measures to restrict cheaper steel imports could also put upward pressure on domestic prices, he said. However, another industry executive said easing import restrictions could help contain the price rise.
Supply constraints caused by maintenance shutdowns and capital repairs at major steel plants have also affected availability, experts said.
Satnam Singh, Director, Crisil Intelligence, said simultaneous maintenance shutdowns and capital repairs at major steel plants had tightened supply. JSW Steel’s Blast Furnace-III at Vijayanagar was shut from September 2025 to June 23, 2026, for an upgrade in hot-metal capacity from 3 MTPA to 4.5 MTPA.
Tata Steel’s quarterly production and deliveries were affected by maintenance shutdowns at its Meramandali and Kalinganagar plants, while SAIL carried out capital repairs at its IISCO Steel Plant in Durgapur and Bokaro Steel Plant.
“Together with controlled distributor allocations, these outages reduced immediate availability in the spot market,” Singh said.
Coking coal prices have also risen sharply after remaining subdued in the first half of August. Prices rebounded from mid-August as Chinese buyers turned to seaborne cargoes following mining disruptions and slower Mongolian arrivals caused by diesel shortages.
Premium hard coking coal (HCC), FOB Hay Point, Australia, averaged USD 230.65 per tonne in July, USD 231.80 per tonne in August and USD 278.84 per tonne in September. By September 24, spot premium coking coal had reached USD 265.50 per tonne FOB Australia, around 40% higher than a year earlier.
However, Singh expects the increase in steel prices to be limited to around 2-3% in the near term.
Experts also said demand from data centres and exports for reconstruction in the Gulf region are unlikely to have a major impact on domestic steel prices.
“Data centres are an emerging source of steel demand, but their volumes remain small relative to India’s overall consumption and are concentrated more in structural steel, rebar and electrical steel than in HRC or CRC. Reconstruction activity in the Gulf represents an export opportunity for Indian mills rather than a major driver of domestic steel prices,” Singh said.
The current price increase is being driven mainly by domestic supply constraints and higher coking coal costs, he added.
Vipul also said reconstruction demand in the Gulf was unlikely to significantly affect domestic prices, noting that although HRC and CRC would be required, export volumes were not large enough to materially alter the domestic market.