Steel Prices Gain Momentum as Policy Support and Export Demand Lift Market Sentiment

Steel prices in India are witnessing a renewed upswing, driven by a combination of policy support, improving export demand and rising input costs, signalling a potential shift after a prolonged period of weakness through most of 2025. Leading steel producers have recently increased hot rolled coil prices, reflecting improving market sentiment across both domestic and overseas markets.

Market sources said several mills raised HRC prices by around ₹500 to ₹750 per tonne in the latest round, marking the second hike this month. Since mid-December, list prices for HRC have climbed by roughly ₹3,000 to ₹5,250 per tonne, while trade-level prices have moved up even more sharply. The safeguard duty imposed on steel imports has provided a crucial cushion to domestic producers, helping them pass on higher costs.

Rising input expenses, particularly imported metallurgical coke prices combined with a weaker rupee, have added to cost pressures. At the same time, tighter availability of certain long products and stronger export orders have lent further support to prices. Industry executives believe this could mark a turning point after steel prices remained under pressure for most of calendar year 2025.

Export demand has emerged as a key driver. According to industry data, India’s steel exports have seen a notable uptick, supported by pre-buying ahead of the phased implementation of the European Union’s Carbon Border Adjustment Mechanism. Finished flat steel exports to Europe have risen sharply, helping ease domestic supply pressure. Opportunities in South-East Asia and a gradual revival of demand from West Asia have also supported export volumes.

However, analysts remain cautious on how long the current momentum can be sustained. The sector has seen significant capacity additions over the past few quarters, with more capacity expected to come on stream by the end of FY26. While demand is projected to improve in FY27, any slowdown in consumption or faster-than-expected supply additions could cap further price gains.

Overall, while policy support and exports have lifted steel prices in the near term, the balance between demand growth and new capacity will be critical in determining whether the uptrend holds over the medium term.