Backdrop & Context
The Indian flat steel market has been navigating through a turbulent phase for several months, marked by weakening margins and a glut of cheaper imports. A long-anticipated policy shift has now stirred excitement across the sector. The central government is actively considering the imposition of safeguard duties to curb imports of low-priced hot-rolled coils, primarily from China and Vietnam, major exporter into India.
The mere expectation of policy protection has created a market ripple. Prices of HR coils have risen sharply since the beginning of 2025. From a base of ₹46,500 per metric ton, the price has now shot up to ₹53,000. This sudden jump of ₹6,500 per metric ton has renewed optimism among Indian mills that have been operating at strained profitability margins for months.
Domestic Demand: Sluggish and Stagnant
Despite the excitement around pricing, the fundamental demand drivers in India remain muted. Industrial activity has yet to rebound meaningfully post-pandemic, and infrastructure project rollouts have been slower than anticipated. This weak macroeconomic backdrop has meant that actual steel consumption hasn’t kept pace with the price increase.
Surplus Looms Large Over Optimism
While prices have surged, Indian mills have also significantly expanded their production capacities over the last 18 months. Multiple greenfield and brownfield expansions, especially in eastern and southern India, are expected to add over 7-10 million metric tons of HR capacity annually. This wave of new capacity is likely to flood the market over the next two quarters.
As inventory levels grow and demand remains stagnant, the threat of oversupply becomes real. If end-user segments fail to absorb the incremental production, the price hike could quickly reverse. Industry experts have flagged this structural imbalance as a ticking time bomb that could offset recent gains unless demand dynamics catch up.
Export Outlook: Chinese Pricing Disrupts Indian Plans
Export markets, traditionally a pressure valve for Indian steelmakers during domestic slowdowns, have also become inhospitable. China’s steel industry, with deep government support, has been flooding global markets with ultra-low-priced HR coils. This pricing war has blocked Indian mills from competing in key destinations like Vietnam, UAE, Europe & South Korea.
At the global level, Chinese Tier 1 exporters are offering HR coils as low as $450 per metric ton, with Tier 2 and 3 mills slashing prices further to $400–420. These aggressive offers have been destabilizing Asia’s regional trade ecosystem, eroding margins for Indian exporters and flooding the domestic market with low-priced inventory. Indian mills view the proposed safeguard duty as essential to restore pricing parity and
Price Forecast: Capped at Best
Looking ahead, analysts suggest that HR coil prices in India may inch up slightly more, potentially reaching ₹55,000–₹58,000 per metric ton, but this is likely to be a short-lived high. Two critical triggers will determine the trajectory: the formal notification of safeguard duties and a tangible uptick in domestic demand.
Without these, the market could see a rollback in prices, especially if mills continue to raise offers while buyers refrain from placing bulk orders. Any future rally will require both policy backing and demand traction, a twin engine that currently appears misaligned.
Key Takeaways:
• HR coil prices jumped by ₹6,500 per metric ton since year begining, reaching ₹53,000
• Safeguard duty anticipation is the primary driver behind the current price surge
• Indian mills like JSW, Tata & JSPL are pushing for better realizations
• Domestic demand remains soft, limiting long-term sustainability of the price hike
• New capacities could flood the market with surplus HR inventory
• China continues to undercut Indian exports, weakening outbound trade
• Analysts warn that the price rally may not hold without formal policy action & demand revival
