India: IF rebar prices rise sharply on cost push; market awaits direction amid energy volatility

• South African imported coal prices surge
  
  
• Mills raise BF rebar prices for early Mar'26
  
  

According to BigMint's assessment, IF-route rebar prices have surged by INR 1,800-3,300/t across key regions over the past 10 days, with Jalna recording the steepest increase of around INR 3,300/t.

The uptrend has largely been driven by escalating geopolitical tensions involving the United States, Iran, and Israel, which have raised cost pressures across the steel value chain through higher energy, freight, and raw material prices. Amid the firm market conditions, traders actively booked material at multiple price levels, enabling mills to secure steady order inflows during the period.

Factors supporting prices

Geopolitical and supply risks:

Heightened Middle East tensions have raised concerns over logistical disruptions and higher South African thermal coal prices. Reflecting this, the portside ex-Gangavaram non-coking coal index rose by around INR 1,700/t to INR 12,100/t, increasing input costs for sponge iron producers.

Surge in sponge iron prices:

Sponge iron prices registered sharp gains of up to INR 2,550/t across major hubs. Rourkela recorded the highest increase of around INR 2,550/t, followed by Raipur (+INR 2,400/t) and Durgapur (+INR 1,250/t), reflecting strong cost-side pressures amid raw material concerns.

Firm semi-finished steel segment:

Semi-finished steel prices also moved higher. BigMint's benchmark Raipur billet prices increased by around INR 2,100/t, while Durgapur billet prices rose by approximately INR 1,200/t, indicating a clear cost pass-through across the steel value chain.

Impact on market

Sponge-based market:

Higher coal and freight costs may raise production expenses for sponge iron producers, supporting DRI prices. Any gas supply constraints could also affect gas-based DRI output and shift demand toward coal-based sponge iron.

Scrap-based market:

Imported scrap prices have firmedshredded scrap (Europe) at $384/t CFR Nhava Sheva (+$18), shredded (US) at $385/t (+$14), and HMS 80:20 (Europe) at $363/t (+$19). With India importing around 8-9 mnt annually, supply risks could keep prices elevated. Buyers remain in a wait-and-watch mode, which may increase reliance on domestic scrap, while LNG shortages could further push domestic scrap prices higher.

If the current geopolitical tensions and gas supply concerns persist, the continued rise in key inputs such as sponge iron, scrap, coal, and billets could keep cost pressures elevated for induction furnace mills. This may prompt IF-route rebar producers to further adjust prices upward, potentially sustaining the current bullish momentum, though buying activity may remain cautious amid market uncertainty.

BF-route rebar sentiment

In line with the broader market trend, primary steelmakers raised rebar prices by INR 500-1,000/t for early-March 2026 dispatches compared with end-February levels, sources informed BigMint. Following the revision, list prices moved to around INR 58,50059,500/t on a landed basis.

At the trade level, BF-route rebar prices (distributor to dealer) increased by around INR 800/t over the past 10 days to approximately INR 59,800/t exy-Mumbai. While elevated prices kept buyer participation largely cautious, shortages of certain sizes in select regions continued to lend limited support to the market.

Outlook

Domestic steel prices have remained firm despite concerns over potential gas supply constraints, with no immediate production disruptions reported by major Indian steelmakers. Market participants noted that the current situation is unlikely to affect steel production in the near term, although a prolonged geopolitical conflict could lead to higher energy costs and greater volatility in input prices.

In the near term, the steel market is expected to be influenced more by fluctuations in energy and freight costs rather than direct disruptions to production or raw material availability. Consequently, domestic rebar prices may witness mixed movements. While cost-side pressures could continue to support prices, buying activity is likely to remain moderate as many market participants have already secured sufficient volumes in recent days.