Steel prices in south India jump by around INR 2,000/t w-o-w on higher input costs

• Thermal coal prices rise by 12% w-o-w, lifting sponge iron prices
  
  
• Steel prices to stay firm on tight feedstock supply, seasonal demand
  
  

Steel prices in South India increased sharply w-o-w on 6 March 2026, by around INR 2,000/t, driven by a surge in basic raw material costs such as sponge iron and coal. Despite moderate trade activity, higher production costs of steel manufacturers supported the price rise and helped maintain a firm market sentiment across the region.

Raw material prices

Sponge iron prices in Southern India increased sharply by around INR 2,000/t w-o-w. The rise was mainly driven by a significant increase in prices of non-coking coal, which is a key raw material used in sponge iron production. Limited availability of coal at ports, mainly due to supply disruptions linked to the US-Iran war, has pushed input costs higher for manufacturers.

On 6 March, RB2 non-coking coal prices stood around INR 11,600/t ex-Gangavaram Port, reflecting an increase of nearly 12% compared to the previous week. The sharp rise in coal prices prompted sponge iron producers to revise their offers upward.

Meanwhile, ferrous scrap (HMS 90:10)prices in Chennai were atINR 34,200/t DAP, up by INR 400/t. Demand from steel billet and finished steel manufacturers was steady, which helped maintain price stability.

However, overall trading activity remained relatively moderate due to the Holi holiday period, as many market participants stayed inactive.

Semi-finished steel prices

Mild steel billet prices in the South Indian market increased by around INR 2,500/t w-o-w in Hyderabad & Chennai, reflecting stronger offers from steel producers.

The main reason for the price rise was the increase in raw material costs, especially sponge iron and non-coking coal. Due to higher input costs, steel smelters raised their billet prices in order to maintain their conversion margins.

Additionally, price hikes announced by primary steel producers operating through the blast furnace route also supported the upward movement. This encouraged secondary steel manufacturers to increase their billet offers in the local market.

Finished steel prices

Finished steel movement in South India remained moderate during the period, mainly due to the Holi festival. Logistics disruptions and operational constraints during the holiday period limited trading activity and limited fresh bookings in the market.

Despite limited movement, steel prices increased due to higher raw material costs. Producers were reluctant to reduce prices as input costs, such as of sponge iron and coal, remained firm.

Blast furnace (BF) route rebar prices stood at around INR 58,500/t in Chennai and Hyderabad, up by INR 500/t w-o-w. Meanwhile, induction furnace (IF) route rebar prices were assessed at around INR 49,500/t, up by around INR 2,000/t w-o-w, for the same locations.

Leading steel manufacturers continued to offer induction route rebars in the local market at prevailing prices, although selective discounts were extended to improve buying interest.

Outlook

Steel prices in South India are expected to rise in the coming weeks, mainly supported by firm raw material costs. Higher prices of coal and strong global scrap prices, along with logistics-related issues, are keeping production costs elevated for steel manufacturers.

In addition, ongoing geopolitical tensions have disrupted the supply of certain raw materials, which may continue to keep input costs high. This could limit the possibility of any significant price correction in the near term.

Moreover, steel demand from the construction and infrastructure sectors is expected to gradually improve after the holiday period. The seasonal pickup in demand may further support steel prices across the regional market.