Domestic Steel Prices Set to Rise by ₹2,000 a Tonne in September on Firm Demand and Input Costs

Domestic steel prices are slated to increase by ₹1,500 to ₹2,000 per tonne, reaching ₹72,500 a tonne in September. This upward movement is attributed to a strong revival in demand following the monsoon season alongside a firm trend in input costs.

Data from the Ministry of Steel indicates that the domestic market continues to experience healthy demand, with finished steel consumption registering an 8 per cent growth during the April–July period. In August, Hot-Rolled Coil (HRC) prices rose 15 per cent year-on-year to approximately ₹70,448 per tonne, while TMT bar prices saw a 6 per cent year-on-year increase to ₹58,000 a tonne.

On the supply side, availability remained tight as several steel companies undertook annual maintenance shutdowns in anticipation of lower demand during the monsoon months. Meanwhile, government spending has supported steady steel demand through a strong pipeline of infrastructure and construction projects. Additional flat-steel demand has been backed by healthy sales in the automobile and consumer durables sectors.

Bhavik Shah, Research Analyst for Metals and Mining at Choice Institutional Equities, noted that domestic steel prices are positioned to move upward in September due to improving post-monsoon demand, tighter availability, and higher manufacturing costs. He added that domestic demand is projected to grow at a 7 per cent CAGR between FY26 and FY29, with capacity utilization expected to stay above 90 per cent, supporting a favorable medium-term pricing environment.

Input cost pressures have also played a role. Coking coal prices have increased by about 5 per cent compared to first-quarter levels. Because coking coal forms a major part of Blast Furnace steelmaking costs, steel mills have an incentive to implement price hikes as demand strengthens.

Vandana Bharti, Head of Commodity Research at SMC Global Securities, stated that steel mills have carried out selective price revisions—including recent hikes of about 14 per cent on certain flat products—to offset rising input expenses and margin pressures. She noted that Indian HRC remains about 5 to 6 per cent below Chinese import parity despite safeguard duties, though this discount has narrowed from historical ranges of 20 to 25 per cent as India became a net steel importer in the first quarter. Steel imports from China, Japan, and Russia rose by roughly 22 per cent quarter-on-quarter during the period.

Vedant Goel, Director at Enlight Metals, observed that prices will likely increase in the upcoming weeks due to solid market sentiment and consistent demand. He pointed out that this price trajectory emphasizes the necessity for manufacturers and steel-consuming industries to implement proactive procurement strategies and track market trends closely.

"The expected rise in steel prices reflects broader economic realities, including resilient infrastructure demand and increasing input costs like coking coal. For businesses operating in manufacturing, construction, and automotive sectors, this trend underscores the importance of rigorous supply chain planning and proactive procurement. When raw material costs shift, companies must adapt their financial forecasting and operational strategies quickly to protect their margins while continuing to deliver on long-term project pipelines." — Dr. Shishir Gupta, Founder & CEO, StartupLanes