Indian steel prices likely to drop sharply

Indian steel prices are expected to decline by Rs 3,000 (US$ 34.52) per ton as U.S. tariffs redirect excess supply to India, S&P Global reported. The 25% U.S. tariff is disrupting export markets and straining local steelmakers, which could delay the full utilization of newly added capacity.

Indian steel mills are expected to witness a sharp decline in prices as U.S. import tariffs take effect, potentially redirecting excess global supply into India, according to S&P Global. The agency estimates that steel prices in India could drop by around Rs 3,000 (US$ 34.52) per ton.

S&P Global Ratings analyst Ayushman Bharati said, “Our downside scenario for a price correction is now harsher, at Rs 3,000/tonne. Under this scenario, the consolidated ratio of large Indian steel companies may rise to 3.5x in fiscal 2026. That is significantly higher than our base case of 2.4x.” 

Domestic steelmakers have been struggling with a surge in low-cost imports, primarily from China, South Korea, and Japan, which reached record levels in the first ten months of the current fiscal year. In August last year, Indian steel prices fell to their lowest in over three years, with hot-rolled coil prices averaging Rs 52,267 per ton.

The 25% tariffs on steel and aluminum imports imposed by U.S. President Donald Trump, set to take effect on March 12, have triggered a global trade war. These tariffs are making exports to the U.S. more expensive, forcing steel shipments to be redirected to alternative markets.

India, which already sources 40% of its steel imports from Japan and South Korea, is expected to see an even greater influx from these countries. These two countries accounted for 15% of the 26 million tonne steel imported by the US in 2024.

India expanded its steel production capacity by approximately 15 million tonnes in 2024. However, weak steel prices could delay the full utilization of this additional capacity and may slow future expansion. Moreover, a rise in cheaper Chinese steel imports—sometimes up to US$70 per metric ton lower than domestic steel—has impacted Indian steelmakers’ profitability over the past year.