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Safeguard duty provides support to domestic prices amid global tariff war

* Domestic HRC prices surged to INR52,000/t by Mar’25-end vs. INR46,500/t in mid-Jan’25, driven by the 12% provisional safeguard duty recommended on March 19. As a result, average domestic HRC prices in Mar’25 rose INR1500/t MoM.

* Long steel prices rose INR2,000/t MoM to an average of INR54,600/t amid limited supply and stable demand in Mar’25. Prices were also supported by a seasonal uptick in demand from the construction sector.

* Channel checks suggest that the supply shortage, caused by a dip in imports, will support further price hikes by mills in flat steel. Long steel prices are expected to sustain in Apr’25, led by adequate orders in mills and lower inventory levels.

* Global flat prices remained under pressure due to oversupply from China (fell 10% YoY to USD467/t in Mar’25) amid weak consumption. While tariff tensions in the US present a potential headwind for the industry, the safeguard duty in India continues to provide critical support to domestic prices.

* According to the Joint Plant Committee (JPC), crude steel production was up 2% MoM to 12.93mt (provisional) in March, totaling 150mt (+4% YoY) in FY25. India’s imports and exports dropped 26% and 10% MoM in Mar’25, primarily due to supply tightness driven by tariffs/duties in both global and domestic markets. We expect inventory pressure to ease considerably, supported by increased domestic consumption and supply tightness.

* As alumina supply stabilizes, spot alumina prices have corrected significantly to USD330/t as of Apr’25. The average alumina price fell to USD435/t in March, declining 15% MoM. LME Aluminum remained flat MoM in Mar’25, while other metals such as Copper, Zinc, Lead, and Nickel saw a 3-5% MoM price increase.

Input costs remain muted in Mar’25

* In Mar’25, iron ore prices remained firm at INR6,000/t for lumps and INR5,060/t for fines. Iron ore prices are expected to remain stable, led by active restocking from steelmakers and improving steel prices amid safeguard duty recommendations.

* Premium HCC coking coal prices (CNF Paradip, India) declined USD13/t MoM to USD189/t in Mar’25, driven by weak demand globally. Most companies expect prices to remain within a tight range in the near to medium term.

* Domestic coal production was up 2% YoY to ~119mt, while Coal India reported a 3% YoY decline in production, reaching 86mt in Mar’25. For FY25, Coal India’s production volume grew 1% YoY to ~781mt.

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