Steel Prices Surge for Third Straight Month Due to Persistent Cost Pressures

The steel market has witnessed a significant price increase for the third consecutive month, with Hot Rolled Coil prices rising by ₹2,000-2,700 per tonne in October, reaching ₹64,700. This upward movement is largely attributed to robust demand alongside rising costs of essential raw materials such as coking coal and thermal coal, further compounded by increased shipping expenses. The current pricing marks a four-year high, reflecting the pressures affecting steel manufacturers.

The primary driving forces behind this price surge include ongoing geopolitical uncertainties affecting global supply chains, as well as domestic factors such as skyrocketing fuel and power costs. Furthermore, maintenance shutdowns at certain mills have limited supply, while the safeguard duty makes imports less competitive. Despite the broader macroeconomic challenges, including inflation and rising interest rates, the Indian steel market is projected to grow by 7.9%, fueled by government infrastructure projects and continued demand from urban real estate activity.

In the short-term, traders and investors should brace for a stabilizing but potentially volatile environment. With essential input costs expected to remain high due to supply constraints and geopolitical tensions, steel mills are likely to uphold strong price floors. Although certain sectors like housing and automobiles may experience reduced demand due to higher costs, the resilience shown in institutional and infrastructure-led consumption suggests that price corrections will be minimal. Therefore, market participants should evaluate their strategies in alignment with these trends while remaining vigilant of macroeconomic indicators.

Source: Market Source

(Expert Note: This report was independently prepared by the Wealthova Commodities team.)