Steel prices at 4-year high; trend to continue in H2: Report

New Delhi: Domestic steel prices have touched a four-year high due to costlier raw materials, especially coking coal, coupled with rise in post monsoon demand, according to market research firm BigMint.

The trend is expected to continue over the remaining quarters of the ongoing fiscal year, it said in a report.

Hot rolled coil (HRC) and CRC -- two of the most common types of flat steel products used globally -- are trading at Rs 64,000 per tonne and Rs 75,000 a tonne, respectively. Such levels were last seen in June 2022, BigMint data showed.


Read more: Domestic steel prices likely to stay firm as demand recovery, supply constraints support market: Report

From August 1, prices of HRC and CRC have increased by Rs 6,000 per tonne and Rs 8,500 a tonne, respectively. HRC and CRC were at Rs 58,000/ tonne and Rs 66,500/tonne at the start of August.

The spike in prices is mainly due to rise in key raw materials coupled with an increase in demand, a BigMint analyst said.

Coking coal, mainly imported, has seen a surge of around USD 65 per tonne to USD 305/tonne in just one month. While iron ore fines have seen a rise of Rs 200-250 per tonne to Rs 4,500 a tonne.

Read more: India can do without US steel exports, says Naveen Jindal; flags domestic demand as key growth driver

Coking coal alone contributes over 30 per cent to the cost of steel production through blast furnace route.

In April-August FY27, the consumption of steel in India reached 70 MT, posting a 7 per cent year-on-year rise.

On the outlook, BigMint said that the prices are unlikely to cool down in the remaining part of the fiscal as demand is expected to continue from both construction and infrastructure sector.

"These sectors consume 60 per cent of the steel produced in India and demand mostly comes after the post monsoon period every year," the analyst said adding the demand is also complemented from the automotive industry.

HRC and CRC are flat steel used in the auto, appliances and construction industries. Hence, any rise in the prices will impact the prices of vehicles, consumer goods and cost of construction as steel is a raw material for these sectors.