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We expect near-term domestic steel demand to be driven by rising infrastructure activity, seasonal uptick in white goods demand, and reduced imports. The proposed 12% safeguard duty on flat steel products may further support domestic prices in the short term. However, upcoming capacity additions could weigh on the sustainability of price hikes. In the medium term, concerns around oversupply —domestic and global — and slowing global GDP amid tariff uncertainty, and the possible devaluation of yuan could put pressure on the steel industry. Nonetheless, falling coking coal and iron ore prices may offer partial margin relief. On the non-ferrous side, the negative impact of recent fall in prices is likely to be partly offset by softer thermal coal prices for aluminium producers.

Global steel production down ~3% YoY in February: As per the World Steel Association, global crude steel production fell ~3% YoY in February, a second consecutive month of fall in CY25. This dip was due to a ~3% YoY and ~4% YoY drop in China and rest of the world (RoW), respectively. China’s steel exports in February grew by ~12% YoY but fell ~10% MoM, followed by ~8% MoM decline in January. In India, crude steel production grew ~6% YoY but declined ~8% MoM in February. Finished steel imports saw a contraction of ~29% YoY and ~36% MoM to ~0.6mn tonne, while exports fell ~60% YoY but increased slightly by ~4% MoM to ~0.4mn tonne in February. During AprilFebruary, India's finished steel imports surged ~16% YoY to ~9mn tonne, while exports dropped ~34% YoY to ~4.4mn tonne. Provisional data for March shows flat YoY trend in India’s crude steel production but ~2% MoM increase

Safeguard duty propels domestic steel prices: China exports hot rolled coil (HRC) prices continue to weaken, declining ~1% MoM in March after a stable February. Prices in Japan declined ~2% MoM in March. In contrast, HRC prices in North Europe rose by ~9% MoM, post registering an increase of ~6% MoM in February. Similarly, the US saw a strong price rally, with HRC prices jumping ~31% MoM in March, after a ~13% MoM rise in February. In India, primary long prices were up for the second consecutive month, up ~5% MoM in March. Domestic HRC prices also rose ~5% MoM in March, marking the third straight month of gains. While fiscal year-end spurt in demand from the project segment, especially from National Highways Authority of India projects was the key reason for an uptick in long product prices, lower imports and safeguard duty supported HRC price recovery. While domestic HRC prices have declined ~11% YoY in FY25, they have risen ~3% MoM in April to date. In March, iron ore prices declined ~5% MoM each in China and Australia. April-to-date iron ore prices are flat MoM in China and Australia vs March average.

Non-ferrous metals fail to hold March gains in April: In March, major non-ferrous metals exhibited a healthy MoM uptick in prices, except LME aluminium, which was flat MoM. On the other hand, LME Zinc was up ~3% MoM, followed by LME copper and lead up by ~4% MoM each and LME nickel up ~5% MoM. However, these gains were short-lived as prices across non-ferrous metals have shown a downward trend in the range of 6-10% during April to date vs March average. In case of China alumina, prices continue to decline for the third consecutive month in March, dropping by ~4% MoM, post a ~16% MoM in January and ~29% MoM fall in February. April-to-date prices have yet to see any relief as prices are down further by ~7% MoM vs March average.

Coal prices remain under pressure: March was another weak month for coking coal as prices fell by ~4% MoM in China and ~7% MoM in Australia. Similarly, thermal coal prices in China dropped ~8% MoM and ~4% MoM in South Africa. April-to-date, coking coal prices in China are down by ~1% MoM but up by ~1% MoM in Australia. April-todate thermal coal prices in China and South Africa are down by ~3% MoM and ~1% MoM, respectively.

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