The prolonged war in Iran has started showing an impact on metals such as steel, aluminium and other key raw materials used in the infrastructure sector. Prices of steel and aluminium have risen by 20-25% within a month — from Rs 51,000 per tonne to Rs 62,000, and from Rs 290 per kg to Rs 376 per kg, respectively. Companies are also facing significant logistical challenges in sourcing certain products from the Gulf after the US and Israel launched an assault on Iran.
The price of South African thermal coal has increased by 12-15% on a freight-on-board (FOB) basis, while Indonesian coal prices are up 16–18%. Contractors and suppliers expect a further 10–15% rise in input costs in the short term, over and above the already elevated 20–25% increase seen in the last month.
Manan Sanghavi, MD of Hammers Infrakon LLP, said: “Steel prices have gone from Rs 52 a kg to Rs 62 and aluminium from Rs 290 to Rs 376. Gypsum and melamine prices have also risen by nearly 17-18%. While these two do not directly impact costs significantly, delays in laminate supplies and price escalations are affecting us, as laminates use melamine.” Gypsum is applied before painting and is often used as a substitute for PoP.
Indian mills have been importing significant quantities of limestone from West Asia, particularly the UAE and Oman. “With the current conflict, import volumes are estimated to have declined significantly,” said Sehul Bhatt, director, Crisil Intelligence. Coking coal prices, meanwhile, were trending higher in the early months of the current quarter but cooled off by 5-6% in March, despite higher freight costs, he added.
“Crucially for the steel sector, the price of premium low-volatile (PLV) hard coking coal recently spiked to 13-month highs (surpassing $207 per tonne FOB) due to global supply tightness and mine disruptions in key sourcing regions. Ocean freight rates also have jumped by nearly 40% almost overnight, fundamentally altering the landed cost of these raw materials,” said Vedant Goel, director of Enlight Metals.
“Volatility in finished steel prices is likely to persist for the next few months. However, moderation in demand growth will keep significant price hikes in check. In FY27, the average price of flat steel is likely to be 2-4% higher year-on-year, while that of long steel may be lower year-on-year,” Bhatt said. The domestic market typically maintains 0.9–1.0x monthly demand inventory across stakeholders in the finished steel value chain.
The industry expects steel prices to rise to Rs 63,500-64,500 per tonne if the war continues.
In January 2026 alone, India produced 14.27 million tonnes of crude steel, marking a 4.1% year-on-year growth.
Anuj Mehta, director, Dhuleva Group, a Mumbai-based real estate developer, said: “Supply has become constrained due to rising demand and limited access to imported components such as aluminium. There is particularly strong demand for specialised coatings. While we are managing procurement through advance planning and strong vendor networks, it is more challenging now than before.”