Domestic steel prices hit four-year high as coking coal costs, demand rise

Domestic steel prices have climbed to a four-year high, driven by a sharp increase in raw material costs, particularly coking coal, along with stronger demand following the monsoon season, according to market research firm BigMint.

The firm expects prices to remain elevated through the rest of the current fiscal year as demand from construction, infrastructure and automotive sectors continues to support the market.

Hot rolled coil (HRC) and cold rolled coil (CRC), two widely used flat steel products, are currently priced at around Rs 64,000 and Rs 75,000 per tonne, respectively. BigMint data showed that these levels were last recorded in June 2022.

Since August 1, HRC prices have risen by Rs 6,000 per tonne, while CRC prices have increased by Rs 8,500. At the beginning of August, they were priced at Rs 58,000 and Rs 66,500 per tonne, respectively.

BigMint attributed the increase primarily to higher raw material costs and improving demand. Imported coking coal prices have risen by about USD 65 per tonne in a month to USD 305 per tonne, while iron ore fines have increased by Rs 200-250 per tonne to around Rs 4,500 per tonne.

Coking coal accounts for more than 30 per cent of steel production costs through the blast furnace route, making movements in its prices a major factor for steelmakers.

Steel consumption in India reached 70 million tonnes during April-August of FY27, registering a 7 per cent year-on-year increase.

BigMint said steel prices are unlikely to ease significantly during the remaining months of the fiscal year, with construction and infrastructure activity expected to pick up after the monsoon. These sectors account for around 60 per cent of India’s steel consumption, while demand from the automobile industry is also providing additional support.

HRC and CRC are extensively used in automobiles, appliances and construction. Sustained price increases could therefore raise input costs for vehicle and consumer goods manufacturers and increase construction costs.

with inputs from PTI