Indian steel prices likely to rise further as coking coal costs and post-monsoon demand strengthen market

India’s steel market is entering a stronger pricing phase as demand rebounds after the monsoon season and production costs continue to rise. Industry analysts expect domestic steel prices to increase further during September, supported by infrastructure activity, automotive production and higher coking coal prices.

The latest trend comes after Hot-Rolled Coil (HRC) prices climbed by nearly ₹4,000 per tonne between August and early September, taking benchmark HRC prices to their highest level in four years. Steel manufacturers are now looking to pass on higher raw material costs while demand across key consuming sectors continues to improve.

The post-monsoon period traditionally marks the beginning of stronger construction activity across India. Government-funded infrastructure projects, housing construction and industrial development typically accelerate during this period, increasing demand for finished steel products. The automotive sector has also continued to support flat steel consumption with steady vehicle production and sales.

Another major factor driving prices is the sharp increase in coking coal costs. Coking coal is a critical raw material used in blast furnace steel production, and its rising prices have increased production expenses for steel mills. With input costs under pressure, manufacturers are seeking higher steel prices to protect operating margins.

Supply conditions have also contributed to the recent price recovery. Several large steel producers undertook scheduled maintenance shutdowns during the monsoon months, reducing spot market availability. Lower inventories held by distributors have further tightened supply in the domestic market.

However, analysts believe the pace of future price increases could be moderated by rising imports. India has remained a net importer of finished steel in recent months, with imports from China, Japan and Russia increasing significantly. Higher imports could create competitive pressure and limit the pricing power of domestic steel producers if overseas supplies continue to rise.

Despite this risk, the overall outlook for India’s steel sector remains positive. Strong infrastructure spending, railway expansion, urban development projects and manufacturing investments are expected to keep steel demand healthy through the second half of the financial year.

For steel-consuming industries such as construction, real estate and automobiles, the expected price increase could raise project costs in the coming months. For steelmakers, however, improving demand and firmer prices may help offset higher input costs and support better profitability during the festive season.