Steel prices expected to remain firm as construction demand recovers

Domestic steel prices are expected to remain firm in September as construction activity picks up after the monsoon and temporary supply constraints support the market, according to a research report by SBICAP Securities reported by Economic Times.

The brokerage expects rebar prices to rise faster than hot-rolled coil (HRC) during September. Rebar, or reinforcement steel, is widely used in buildings and infrastructure projects, while HRC is a flat steel product used across construction and manufacturing.

The outlook follows a sharp recovery in rebar prices in August. The average blast-furnace-route rebar price rose 8.6% month-on-month to ₹53,294 per tonne, ending a three-month run of declines, according to the SBICAP report cited by ET Infra. The increase came as planned maintenance at several integrated steelmakers reduced available supply while expectations of stronger construction activity supported demand.

HRC prices also increased, although at a slower pace. The average Mumbai HRC price rose 1.2% month-on-month to ₹58,575 per tonne in August, according to the report. The HRC-rebar price spread narrowed to around ₹5,280 per tonne in August, from about ₹8,800 per tonne in July.

The pressure on supply is one of the factors supporting the current price outlook. Steelmakers have scheduled maintenance at some plants, limiting production while construction demand is expected to strengthen as the monsoon season ends.

Consumption data also points to relatively firm demand. Finished steel consumption rose 6.5% year-on-year to 14.4 million tonnes in July, while finished steel production increased 1.4% to 13.7 million tonnes, according to Joint Plant Committee data cited by SBICAP Securities.

Trade flows, however, remain an important variable. Steel exports rose 44.1% year-on-year to 0.7 million tonnes in July, while imports increased 9.5% to the same level, leaving India marginally a net importer, according to the report. The brokerage said the eventual direction of domestic prices will depend partly on the pace of demand recovery and the balance between exports and imports.

There are also cost pressures behind the market. Reuters reported earlier this month that rising coking-coal costs were increasing steelmakers' production expenses, while post-monsoon demand from infrastructure and automotive sectors was expected to tighten the market. Indian HRC prices had already risen sharply from August into early September.

For construction companies and homebuilders, firmer steel prices can increase project input costs. Rebar is a particularly important material in reinforced-concrete buildings, roads, bridges and other infrastructure.

The outlook is not without risks. Rising steel imports, particularly from China, could limit how far domestic mills are able to increase prices. Reuters reported that India became a net importer of finished steel between April and July, with imports rising 36.6% year-on-year over that period.

For now, the market is being shaped by three competing forces: recovering post-monsoon demand, constrained domestic supply and the possibility of increased imports. SBICAP Securities expects the first two factors to keep steel prices firm in September, particularly for construction-focused rebar.

Sources:

https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/domestic-steel-prices-likely-to-stay-firm-as-demand-recovery-supply-constraints-support-market/articleshow/134370008.cms

https://infra.economictimes.indiatimes.com/news/construction/domestic-steel-prices-likely-to-stay-firm-as-demand-recovery-supply-constraints-support-market-report/134378740

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

https://www.business-standard.com/industry/news/steel-prices-set-to-rise-further-on-coking-coal-costs-demand-revival-126090800586_1.html