Mumbai: Within a week of the finance ministry imposing a safeguard duty on steel imports, domestic steelmakers raised prices across key products in early January.
Prices of hot-rolled coil (HRC) and cold-rolled coil (CRC) were increased by 2-4% on 3 January, after a 1.5-3% hike in late December 2025, according to commodities market intelligence firm Big Mint. Rebar prices were raised by nearly 3-6% in early January, following a hike of around 4% in late December.
The increases are expected to support the profitability of domestic steelmakers, who are in the midst of a significant capacity expansion drive, after subdued pricing over the last three months weighed on margins, analysts said.
The safeguard duty, announced on 30 December 2025, would be levied for three years on most grades of flat steel products at 12% for the first year, 11.5% for the second and 11% for the third year. India had notified an interim order imposing the duty in April to halt the surge in imports, which had lapsed on 7 November.
Benchmark HRC prices had fallen to ₹47,100 per tonne in November, a 10-month low, while rebar prices stood at ₹47,000 per tonne, a five-year low due to low demand and oversupply.
Hot rolled coil is used in automobiles and home appliances, while rebars are used in construction and infrastructure.
Tata Steel, JSW Steel, Jindal Steel, AMNS India and Steel Authority of India did not respond to Mint’s queries on price hikes.
Import costs rise
According to Niladri N Bhattacharjee, Partner and Metals and Mining Industry Leader at Grant Thornton Bharat, the December safeguard duty, coupled with a weaker rupee, has raised the cost of steel imports from countries such as China and Japan, giving domestic producers confidence to raise prices.
“Supported by strong domestic demand, these factors have allowed steelmakers to push through price hikes. While prices remain well below FY22 levels, the move signals an improvement in steelmakers’ bargaining power,” Bhattacharjee said. “The price hike might also improve the profitability of the steelmaker marginally in Q4 compared to earlier quarters when prices hit multi-year low.” he said.
“Production cuts by smaller steelmakers helped restore balance between demand and supply, while the imposition of a three-year safeguard duty gave producers room to raise prices, as domestic steel was trading at a discount to the landed cost of imports from countries such as Japan and China,” said Dhruv Goel, CEO of Big Mint. The price hike will “help improve profitability of the mills.”
Strong export bookings driven by a weaker rupee, better order acceptance and seasonal demand during the January-March period have eased selling pressure on mills, allowing them to sustain higher prices at least through the current quarter, Goel said.
Rising input costs have also contributed to the price increases, particularly imported coking coal, which has become more expensive due to higher global prices and rupee depreciation pushing up production costs, he added.
With the safeguard enacted, domestic prices may now trade at a premium of minimum 10% to international prices for the next two and a half years, analysts at ICICI Securities wrote in a note in a 31 December report.
Cautious on increase
Analysts, however, remain cautious about the scope for further increases.
“The increase in domestic price so far appears to be sustainable with more headroom for increase. However growth in domestic capacity and capacity utilization might restrict growth to lower levels than the FY22 highs,” said Bhattacharjee.
Goel echoed similar sentiments, noting that any further increases may face resistance. Prices are expected to remain firm in the near term, although oversupply risks could emerge in the second half of 2026 as new capacities come on stream, even as demand continues to grow steadily at 7-8%.
Among upcoming capacities is a 3 million tonnes per annum (mtpa) plant commissioned by Jindal Steel in September 2025, with another expected to be commissioned by the end of FY26. Besides, JSW Steel and Tata Steel Ltd’s 5 mtpa facilities are expected to achieve full ramp-up by FY26-end. These facilities may keep the domestic market in surplus unless the producers reduce their capacity utilization to support prices.
During the first eight months of FY26 India remained a net importer of steel, with domestic production at 109.726 million tonnes, according to a steel ministry report accessed by Mint. Finished steel imports stood at 4.19 million tonnes, down 36.3%.
In the same period, India exported 4.18 million tonnes of finished steel, a rise of 32.6%, while domestic consumption increased 7.3% to 105.04 million tonnes, the report added.