Steel HRC prices hit 2-year high at ₹54,000/tonne; how long will the rally last?

India's steel market has staged a dramatic reversal. In November 2025, HRC prices were languishing near five-year lows of around ₹47,000 per tonne. Today, they stand at ₹54,000 — a two-year high — driven by a potent combination of surging raw material costs, a government safeguard duty on imports, and a frontloaded infrastructure demand cycle. The question now is whether this rally has legs, or whether April will bring a correction.

According to Hemant Dewangan, AGM at commodity intelligence firm BigMint, both cost pressures and policy support remain firmly in place for at least the near term. Talking to ET Now, he argues that the rally is not speculative — it is grounded in fundamentals.

The coking coal factor

The single largest cost driver behind the steel price surge is coking coal, which contributes 33–35% of the total cost of production for Indian steelmakers. Coking coal prices have climbed approximately 30% on a year-on-year basis, leaving producers with little choice but to pass on costs downstream. Until that input pressure eases — and there are early signals it may be starting to cool — the floor under steel prices stays elevated.

Raw material prices are showing indicators that they are cooling off — so further on, there will not be as much cost pressure as we have seen in the last two months.

-Hemant Dewangan, AGM-PIC, BigMint

Safeguard duty: A protective wall

The government's 12% safeguard duty on imported HRC — set to increase gradually over three years — has proved to be a genuine deterrent. Total steel imports have fallen 13% year-on-year to 8.1 million tonnes. With imported steel currently priced around ₹57,000 per tonne — a ₹3,000 premium to domestic prices — there is no economic logic for importers to enter the market. The duty has effectively sealed the domestic market from cheaper foreign supply for the time being.

Demand: Infrastructure is leading

Infrastructure and construction demand have both accelerated since December, with rebar and HRC prices reflecting genuine end-user offtake rather than restocking. Dewangan forecasts domestic steel volume growth of 8–9% year-on-year through the fourth quarter of FY26 and into Q1 FY27. The pre-monsoon construction window — which effectively runs through June — keeps order books healthy for the next two quarters.

Margins: An inflection point

The financial impact on steel producers is becoming tangible. EBITDA per tonne currently ranges between ₹5,000 and ₹13,600 across major manufacturers. Dewangan forecasts an uptick of ₹3,000–4,000 per tonne in the coming quarter — a meaningful improvement driven by higher realizations and moderating input costs. If raw material prices do cool as expected, the margin expansion could prove wider than current estimates.

April remains the key watchpoint. Fiscal year-end disruptions can cause demand to temporarily shift, and any softening of the infrastructure pipeline after Q4 spending deadlines could create short-term price volatility. But with safeguard duty in place, coking coal stabilising, and domestic demand structurally tied to a multi-year infrastructure buildout, the medium-term setup for Indian steel looks considerably more favourable than it did just three months ago.