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Domestic prices improve amid safeguard duty expectations

* Flat steel prices for both HRC and CRC improved INR1,500-2,000/t MoM to INR48,500/t and INR54,200/t in Feb’25, as tier-I steel mills implemented a price hike of INR1,500-2,000/t for Feb’25 sales.

* Domestic long steel prices rose marginally MoM to INR53,500/t in Feb’25 amid limited inventory; the rise in demand was also driven by orders from the infra sector as year-end approaches.

* Channel checks suggest that mills may announce another price hike of INR1,000/t for Mar’25 sales based on the Feb’25 exit price for flat steel, in the hopes of the safeguard duty announcement. Mills already increased long steel prices by INR1,000/t MoM for Mar’25 deliveries and anticipate further hikes driven by orders from the infra sector.

* Chinese HRC (FoB) prices remained week at USD470/t in Feb’25 (USD560/t in Feb’24), primarily due to slower-than-expected demand recovery, coupled with rising trade tension and tariff threats over Chinese steel products. Additionally, US has imposed 25% tariff to control steel and aluminum imports (from China, Canada, and Mexico). These factors are expected to continue putting global steel prices under pressure globally.

* According to the Joint Plant Committee (JPC), India's finished steel imports declined 36% MoM and 29% YoY to 0.607mt in Feb’25. However, imports were up 16% YoY to ~9mt in Apr-Feb’25. Over 80% of the imports come from South Korea, Japan, and China, driven by their subdued domestic demand. Further, the FTAs with South Korea and Japan facilitate duty-free imports into the country.

* As alumina supply has stabilized, average alumina prices saw a consecutive 15% MoM moderation to USD517/t in Feb’25. Prices are expected to decline further with rising supply and the reopening of closed refineries.

* Copper/Aluminum/Lead prices improved MoM, while Zinc and Nickel largely remained flat MoM in Jan’25 and Feb’25, respectively.

Input costs remain bottomed out in Feb’25

* In Feb’25, iron ore prices remained steady 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.

* Premium HCC Coking coal prices (CNF Paradip, India) declined 2% MoM to USD200/t in Feb’25 due to weak steel demand. In China, the domestic coking coal prices saw a tenth consecutive price cut of RMB50-55/t, as the government focused on higher production, leading to oversupply in the muted demand environment.

* South African thermal coal prices hit USD100/t in Feb’25, led by weak demand and increased availability of domestic coal at reasonable prices. Domestic coal production was up 2% YoY to ~98mt, while Coal India reported flat production YoY to 74mt in Feb’25.

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