Why Are Steel Share Prices Increasing in India?

In India, steel sector stocks have been witnessing a continuous surge these days. Major stocks like Tata Steel, JSW Steel, and SAIL have seen strong buying activity, leading investors to wonder why are steel share prices increasing day by day? There are several solid reasons behind this: the government’s increased spending plans on infrastructure, the benefit to domestic companies from safeguard duties on imports, and the projected 8% increase in steel demand by 2026. In this article, we will understand the real reasons behind this surge in simple terms.

The 3-year Safeguard Duty in India and its impact on steel shares.

The Indian government has imposed a three-year safeguard duty on select flat steel products to curb cheap imports. This decision was made after the trade regulator (DGTR) found that rising imports at low prices threatened to harm the domestic steel industry. This duty applies only to imports below a certain threshold price – meaning imports at normal prices will not be subject to this additional levy.

This measure is specifically designed to protect domestic mills from sudden price drops and maintain stability in the market.

Safeguard Duty Structure 

Duration	Duty rate	Note
First year	12%	Applicable to selected flat steel imports.
Second year	11.5%	Phased reduction
third year	11%	Staggered structure
Applicable products	HRC, CRC, coated & colour-coated steel	On imports below the threshold price

Which steel products are covered?

Safeguard duties are primarily applied to products that are widely used in the infrastructure, automotive, engineering, and construction sectors.

• Hot Rolled Coils(HRC)
• Cold Rolled Coils (CRC)
• Plates & flat steel products
• Metallic coated steel
• Colour-coated steel

Why is this a positive sign for steel shares?

• Control over cheap imports : Steel imports from China, Vietnam, Korea, and Japan at low prices were putting pressure on the domestic market. The imposition of duties will reduce under-priced imports, improving the competitive position of Indian companies.
• Support for domestic prices : With reduced import pressure, domestic mills have the scope to maintain or increase prices. HRC prices have seen an increase of ₹3,000-₹5,000 per ton in recent months this is part of the same trend.
• Improved margins and earnings visibility : When the risk of price declines is reduced, companies have greater predictability regarding their realizations and cash flows. The stock market typically prices in such policy-supported stability positively which is why several steel stocks have shown strength recently.

Adjustment in Anti-Dumping Duty – Avoiding Double Levy

The government has also amended the anti-dumping duty framework to prevent the simultaneous imposition of both safeguard duty and anti-dumping duty on the same import.

• If a safeguard duty is in effect, the anti-dumping duty will be adjusted by that amount.
• This is a WTO-compliant (trade-compliant) approach.
• The policy remains clear and stable for investors and companies.

Read Also: Steel Price Predictions for the Next 5 Years in India

The real prices of steel are going up.

Since the beginning of 2026, the Indian steel market has witnessed a continuous increase in the prices of Hot Rolled Coil (HRC) and other major steel products. Domestic mills have raised prices twice to improve their margins once in December and again in January. Such consistent increases also indicate an improvement in the demand-supply balance in the market. According to industry reports, domestic HRC and CRC prices increased by approximately 4% in January 2026, while products like rebar saw a surge of around 7%. This suggests that the price increase is not merely due to inventory adjustments, but reflects a genuine rise in steel prices.

Steel price benchmarks 2026 

Steel products	Current price (approx.)	Note
HRC (India Ex-Y Mumbai)	₹53,800/tonne	According to data from February 3, 2026
CRC (India Ex-Y Mumbai)	₹61,200/tonne	Flat steel rate
HR Plate (India)	₹55,100/tonne	Plate rate
Rebar (Trade Level)	₹54,500/tonne	14% MoM retail price data in January
HRC-Rebar Spread	-₹2,500	Reverse spread signal

India’s steel exports are strong, and this is impacting its stock prices.

Between 2025 and 2026, India’s steel exports have shown significant growth. This is a major reason why “steel share prices are increasing” and why investors are being attracted to the sector.

Duration	Data	Description
April–November 2025	5.77 million tons (YoY +31%)	India recorded a 31% increase in total steel exports during this period largely due to increased buying driven by preparations in the European Union.
CY 2025 (Calendar Year)	8.59 million tons (YoY +4%)	Exports are projected to be up 4% in 2025 with exports gaining momentum again, particularly in the second half of the year.
Export to EU	2.46 million tons (YoY +45% in Apr–Nov)	The European Union influenced forward purchasing, which led to increased deliveries of flat steel products such as HRC and CRC.

CBAM and Europe’s Role

Although the European Union’s Carbon Border Adjustment Mechanism (CBAM) came into effect in 2026 imposing carbon costs on imported steel — European buyers still made advance purchases at the end of 2025 to stock up before the new regulations took effect.

Exports have a direct impact on why steel share prices are increasing.

• Domestic Demand-Supply Balance Strengthens : When exports increase, domestic market inventory decreases, leading to better utilization of production capacity. This reduces downward pressure on prices and allows companies to command better rates.
• Improved Margins and Earnings Confidence : The premium rates received for exports can differ from domestic rates especially in niche markets leading to improved profitability and margins for companies. Investors view this as a positive indicator for future earnings.
• India’s Role in Global Balance : As production slowed or policy pressures increased in countries like China and others, India leveraged its manufacturing capacity and export network. This shifted foreign demand towards India, which in turn drives up steel stock prices.

Why is domestic steel demand increasing, and what are the implications?

Domestic Steel Demand Trends (Figures valid for 2025–26)

According to recent industry estimates, steel consumption in India is steadily increasing. A report by the rating agency ICRA indicates that domestic steel demand will grow at a robust rate of approximately 8% in fiscal year 2025–26 (FY26), translating to an additional requirement of around 11–12 million tonnes (MT). This growth is primarily driven by strong activity in the infrastructure, construction, and automobile sectors.

Year	Domestic steel demand growth (%)	Estimated additional demand
FY25/2026	8%	11-12 million tons of additional demand
2025–26	9% (according to other estimates)	Consistently strong industrial use

Homes, infrastructure, and manufacturing are the main consumers.

• Infrastructure Development: Strong demand persists due to large government projects such as roads, railways, freight corridors, and metro projects.
• Construction and Real Estate : Construction activities are increasing in urban and semi-urban areas, leading to higher demand for thermal, rebar, and structural steel.
• Manufacturing and Automobiles : The manufacturing industry and automobile production are experiencing a surge, resulting in robust demand for various steel products such as plates, sheets, and rolls.

Why Steel Shares Price Is Increasing

1. Import Protection Provides Price Support : The government’s imposition of safeguard duties on flat steel has curbed cheap imports. This is helping domestic companies maintain better pricing and has reduced pressure on margins. This is a direct positive signal for steel stocks.
2. Mills Implement Consecutive Price Hikes : In recent months, several steel mills have increased prices for HRC and other products multiple times. When companies raise actual product prices, the market interprets this as a sign of improved future revenue.
3. Export Growth Balances Demand : The recent increase in steel exports has eased pressure on domestic supply. Strong orders from the EU and other markets have led to improved capacity utilization which supports share prices.
4. Domestic Demand + Capex Cycle : Infrastructure and construction demand remains strong, and companies like SAIL and NMDC are increasing capital expenditure (capex). Increased capex indicates that companies are confident about future demand.

Read Also: Top Steel Penny Stocks in India

Risks That Can Reverse Steel Share Rally

1. Removal or weakening of Safeguard Duty : Currently, steel stocks are receiving significant support from the government’s safeguard duty. If this duty is removed or the rate is reduced in the future, cheaper imports could surge again potentially putting pressure on domestic prices and stock values.
2. Sharp decline in Global Steel Prices : Steel is a global commodity. If international steel prices fall sharply, Indian mills may also have to lower their rates which could quickly change market sentiment.
3. Resurgence of Dumping from China : If China or other Asian countries start exporting surplus steel at low prices, it could lead to an oversupply in the Indian market. This would impact both margins and pricing power.
4. Rapid increase in Domestic Capacity : If new capacity (new plants/blast furnaces) in India comes online faster than expected, the increased supply could put pressure on prices especially in flat steel.
5. Slowdown in Domestic Demand : Infrastructure and construction demand are currently the basis of the rally. If government capital expenditure or real estate activity slows down, steel consumption could decrease which would be a negative signal for stocks.
6. Margin Pressure from Raw Material Costs : Rising costs of met coke, iron ore, and energy can squeeze companies’ margins. If final steel prices don’t rise as fast as costs, profit expectations could weaken.

Conclusion

The rally seen in steel stocks is not just short-term enthusiasm. The government’s safeguard duty, rising steel prices, strong export orders, and robust domestic infrastructure demand are all contributing to supporting the sector. However, the steel business is cyclical, so instead of investing blindly, it would be wise to make decisions based on data and quarterly results.

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