Steel Price Surge in Tiruchi Raises Cost Concerns for Construction Sector

The sudden rise in steel prices in Tiruchi has triggered concern across the construction sector, as builders and developers grapple with higher input costs at a time when activity is expected to peak. Steel, which accounts for nearly 15% of overall construction costs, plays an even bigger role in infrastructure-heavy projects such as bridges and large commercial structures, where its share can rise to 20–25%.

After remaining largely stable through 2024 and 2025, steel prices have started climbing since the beginning of 2026. Industry participants attribute the upward trend to the Union government’s decision to impose an import tariff ranging between 11% and 12% on select steel products for a three-year period. The move, aimed at protecting domestic manufacturers, has had a cascading impact on market prices.

In December, steel prices in Tiruchi were hovering between ₹47,000 and ₹52,000 per tonne, depending on the brand. Medium-range steel was available closer to the lower end, while top branded products were sold at the higher end, excluding GST and transportation costs. Since then, prices have reportedly increased by ₹5,000 to ₹8,000 per tonne, adding fresh pressure on construction budgets.

Builders say the price rise has not been driven by a sudden spike in demand. Instead, it comes at a time when the sector is preparing for the summer months, traditionally considered the most favourable period for launching new construction projects. With many contracts signed based on earlier price assumptions, the sudden escalation is likely to squeeze margins and affect project viability.

According to P. Ravichandran, president of the Tamil Nadu South chapter of the National Real Estate Development Council, the reasons behind the sharp increase remain unclear, even as its impact on ongoing projects is being closely studied. He has urged both the Union and State governments to intervene and take steps to rein in price volatility, stressing the need to safeguard the interests of the construction sector.

If prices continue to rise, stakeholders warn that project timelines, pricing for end-users, and new project launches could all come under strain in the months ahead.