Oil price correction begins to ease cost pressures, but weak demand and supply disruptions keep steel markets uneven - A-360 degree view

• Brent declines to around $97/bbl following US-Iran ceasefire, easing energy, freight cost pressures
  
  
• Lower input costs begin to weigh on steel and scrap prices, though supply disruptions continue to provide support
  
  

How will the ceasefire between the US and Iran reshape global metals markets? Following the reopening of key shipping routes and a sharp correction in crude prices, BigMint presents a detailed update on the implications for Indian metals, raw materials and energy markets:

Brent crude futures have corrected to around $97/bbl following the US-Iran ceasefire, with very low sulphur fuel oil prices in Singapore declining to around $795/t, signalling an early easing in energy and freight costs across global supply chains. This shift is beginning to transmit into Indian markets, where steel and raw material prices have started to soften, even as weak demand and ongoing supply disruptions continue to shape price direction.

Finished steel prices declined across regions on 8 April, with corrections seen in billet and rebar as mills adjusted offers in response to lower raw material costs and softer sentiment. The easing in input costs is beginning to weigh on prices, reversing part of the earlier cost-driven uptrend.

Buying activity has turned cautious, with lower trading volumes reported across segments as buyers step back following the recent correction in input costs. Procurement is increasingly need-based, limiting the ability of mills to sustain earlier price levels despite relatively tight availability.

Export activity remains constrained. Indian HRC offers had increased during the conflict period, but no firm bookings were reported, indicating weak conversion of demand into trade. Earlier disruptions across key shipping routes continue to weigh on export viability, and any recovery will depend on how quickly freight conditions normalise following the ceasefire.

Raw material markets are showing a clearer response to easing cost pressures. Domestic ferrous scrap prices declined sharply, with HMS (80:20) in north India falling by around INR 1,200/t amid improved availability and liquidation of previously held stocks. The correction reflects both increased supply and a shift in sentiment following the easing in geopolitical risks.

Imported scrap markets remain largely unworkable, with bids trailing offers and buying interest subdued. Wider bid-offer gaps continue to limit deal activity, particularly in South Asia, where demand remains weak despite some softening in costs.

South African thermal coal prices at Indian ports declined week-on-week, with ex-Paradip RB2 (5,500 NAR) down INR 350/t to INR 11,200/t and RB3 (4,800 NAR) falling by INR 200/t to INR 10,200/t amid weak enquiries and subdued buying. Buyers continued to prefer domestic coal due to better availability and pricing, while sentiment weakened further following the ceasefire, with expectations of additional downside as freight costs ease.

Coal vessel rates have stabilised after earlier volatility, supported by improved vessel availability and limited fixture activity, indicating subdued cargo movement rather than a recovery in demand.

In non-ferrous markets, aluminium prices remain supported by tight global supply conditions, while broader demand signals remain cautious. Price movements continue to reflect supply-side factors rather than a recovery in consumption.

Supply-side disruptions continue to offset the impact of easing costs. Iranian steel production is expected to remain constrained in the near term following damage to major facilities, which is likely to tighten availability in semi-finished markets and support billet and slab prices despite lower energy costs.

Lower oil prices are beginning to ease cost pressures across energy and logistics chains, but weaker demand, cautious buying behaviour and ongoing supply disruptions are together creating an uneven market, where price corrections are emerging alongside continued underlying support.