Nomura expects Indian steel producers to gain from recent price hikes despite global cost pressures. Domestic rebar prices saw their first weekly increase in three months, while flat steel prices remain steady. Investors may monitor how production growth and regional demand influence profit margins for major domestic players.
Detailed Coverage
The Indian steel sector is navigating a period of shifting global trends and domestic price adjustments. Recent reports from Nomura indicate that domestic manufacturers are showing resilience, supported by a rebound in rebar prices and firm demand for flat steel products. For the week ending July 24, 2026, rebar prices in India rose by ₹350 to reach ₹48,300 per tonne, marking the first increase after a three-month decline.
Price Trends and Market Dynamics
While rebar prices have started to recover, hot rolled coil (HRC) prices experienced a marginal dip of ₹50 per tonne, settling at ₹57,800. A key indicator for profitability in the sector is the flat-long spread, which currently remains robust at over ₹9,500 per tonne. This gap between flat and long steel prices continues to provide a buffer for manufacturers.
Global market conditions remain mixed, presenting both challenges and relief for Indian producers. In China, export prices for HRC saw a decline of $5 to $495 per tonne. In contrast, European HRC prices rose by EUR 10 to EUR 695. On the raw material front, input costs showed signs of easing as imported coking coal prices dropped by $6 to $224 per tonne, while global iron ore prices remained stable at $93 per tonne. Domestically, NMDC recently lowered its prices for iron ore lumps and fines, which may help manage production costs for integrated steelmakers.
Domestic Production and Consumption
Official data for June 2026 highlights the ongoing momentum in domestic activity. Crude steel production in India grew by 3.9% year-on-year to 14.06 million tonnes. Finished steel production also saw a healthy increase of 6% to reach 13.76 million tonnes. Consumption continues to outpace some production metrics, rising 7.2% year-on-year to 14.19 million tonnes.
Despite high domestic production, India remains a net importer of finished steel. In June, imports reached 0.70 million tonnes, surpassing exports of 0.62 million tonnes. This import-export balance is a factor that investors often track, as high import levels can sometimes pressure domestic pricing power.
Investor Context and Risks
Nomura suggests that price increases implemented between late FY26 and early FY27 are likely to offset cost inflation resulting from geopolitical tensions in West Asia. However, the sector is not without risks. While direct exposure to US markets via Section 232 tariffs is limited for many Indian producers, broader global economic uncertainty and fluctuations in coking coal prices remain important variables.
Moving forward, the focus for investors will be on whether domestic consumption continues to grow at the current pace and if manufacturers can maintain these price levels. Future updates on net import volumes, raw material cost trends, and the ability of firms to pass on inflationary pressures to customers will be key for assessing quarterly margin performance.