Indian Steel Prices May Rise Further as Coal Costs and Demand Increase

Indian steel prices are expected to rise further in the coming weeks as higher coking coal costs and a revival in post-monsoon demand tighten the domestic market.

The increase could bring fresh cost pressure for infrastructure, construction and automobile companies just as activity picks up after the monsoon, according to a Reuters report published on September 8.

Prices of hot-rolled coil, a widely used steel product, have already moved sharply higher. After falling modestly between June and July, hot-rolled coil prices rose by ₹4,000 per metric tonne from August to early September, reaching a four-year high, according to commodities consultancy BigMint, as reported by Reuters.

Market participants expect prices to rise further. Vedant Goel, director at Enlight Metals, told Reuters that steel prices could increase by around ₹3,500 per tonne in the coming weeks.

The main driver is the rising cost of coking coal, a key raw material used in steelmaking. Higher coal prices have squeezed the margins of Indian steel producers, prompting mills to pass some of those additional costs on to customers.

At the same time, demand is beginning to strengthen. Infrastructure activity is expected to pick up after the monsoon, while demand from the automobile sector is also supporting the market.

Supply conditions have added to the upward pressure. Reuters reported that planned maintenance shutdowns at major steel mills, tighter availability in the spot market and low inventories held by distributors have contributed to the recent recovery in prices.

For the construction sector, the implications could be significant. Steel is one of the largest material costs in many building and infrastructure projects. A sustained increase in prices can raise the overall cost of construction, particularly for projects that have not locked in material prices in advance.

That does not necessarily mean an immediate increase in home prices. Developers typically face several costs beyond steel, and their ability to pass higher expenses on to buyers depends on local demand and market conditions. However, prolonged increases in construction input costs can put pressure on project budgets and margins.

There is also a factor that could limit how far domestic steel prices rise: imports.

India was a net importer of finished steel between April and July, according to government data cited by Reuters. Finished steel imports during that period increased 36.6% from a year earlier, with China accounting for 31% of India's imports.

The government has already taken measures aimed at addressing the rise in overseas shipments, including a safeguard duty on some steel imports. India also launched an anti-dumping investigation in June into hot-rolled coil imports from China, Japan and Russia.

Despite those measures, imports have continued to rise.

That could restrict the pricing power of domestic steel producers. Fitch Ratings has identified higher imports and renewed competitive pressure as a key risk to steelmakers' margins.

For now, the market is being pulled in two directions: rising production costs and stronger domestic demand are pushing prices upward, while increased imports could prevent a much larger jump.

For builders, infrastructure companies and other major buyers of steel, the next few weeks will determine whether the current increase is a short-term post-monsoon adjustment or the beginning of a more sustained rise in construction material costs.

Sources

https://www.reuters.com/world/china/indian-steel-prices-set-rise-further-coking-coal-costs-demand-revival-2026-09-08/

https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/indian-steel-prices-poised-for-surge-amid-coking-coal-costs-and-demand-revival/articleshow/133915899.cms