More Stories

Informist, Tuesday, Jun. 9, 2026

 

NEW DELHI/MUMBAI – A combination of policy, supply-side dynamics pertaining to production, and exports have been driving up global steel prices, Paul Bartholomew, associate director, S&P Global Energy, said Tuesday. "...we haven't sort of seen much on the sort of downstream demand side. That's certainly been the case in China," Bartholomew said at a webinar on divergent trends in steel in Asia-Pacific organised by S&P Global Ratings. 

 

In a presentation accompanying the webinar, the ratings agency said global steel prices are being supported by policy rather than demand. It said the West Asia conflict provides inflationary pressure to steel prices in Asia and downstream demand remains subdued in most markets in the region.

 

According to Bartholomew, steel prices in India are "kind of more pushed up because of inflationary impacts of the Middle East situation rather than any particularly strong domestic demand." India has got its own domestic market protected by stringent safeguard measures and has also been exporting quite a lot of steel into Vietnam, he said. "Most of the steel that's been going to Vietnam in recent times has all been really coming from India or Indonesia," Bartholomew said. 

 

India's annual steel consumption will increase by more than 50 million tonnes over the next five years, after 2025-26 (Apr-Mar) saw finished steel consumption of 165 million tonnes, as per the rating agency's report on India's steel industry. "In reality, a lot of the Southeast Asian steel capacity probably won't ever see the light of day for various reasons. But India, on the other hand, a lot of that new steel capacity is  realistic," Bartholomew said. He expects a big increase in Indian crude steel production over the next decade and beyond.

 

This will be on the back of the Indian steel industry being very much in a growth mode, and "not so concerned with things like decarbonisation," he said. Most of India's new steel capacity is traditional blast furnaces that use iron ore and coking coal, he said. "...the miners are quite looking at India very, very closely at the moment. We're getting a lot of interest, a lot of requests really around for more information around India's iron ore demand growth," Bartholomew said. But he does not expect India to ever displace China in this regard. India's steel capacity growth is expected to drive demand for raw materials, the rating agency said in the presentation. 

 

Anshuman Bharati, associate director, corporate ratings, S&P Global Ratings, said India's steel consumption is likely to grow at a rate of about 8-10%. "There could be some short-term headwinds... which could be because of monsoon or cost inflation. In the medium to long term, we expect the demand should remain steady," Bharati said.  

 

The rating agency said the Indian steel industry is in the midst of a multi-year capex cycle given its aims to increase steel capacity to 300 million tonnes by 2030. "The top four steel producers in India will account for bulk of this addition," Bharati said. Most of the steel consumption growth in India will come from the property and the infrastructure sectors, according to Bharati.

 

"India introduced a provisional 12% duty on steel imports in April last year (2025), and this was for a period of 200 days. But later that year, India extended it for three years, and this will be in place till April 2028. Now, because of this, output prices increased significantly from the beginning of 2026, Bharati said.

 

Bharati, however, said that if the Indian government decides not to extend the provisional 12% duty on steel imports beyond 2028, "then probably the pricing buffer that domestic steel industry has right now, will not be there...And as a result, the margins of Indian steel companies might come under pressure." 

 

Amid the West Asia conflict, higher freight and elevated energy costs will hit the profit margins of Indian steel companies, but the hit should get absorbed by high domestic steel prices and strong earnings, the rating agency said in its India steel report. Indian steel companies' leverage metrics have improved, and the steel industry's debt to earnings, before interest, tax, depreciation, and amortisation is declining, it said.

 

Bharati said the large capacity expansion will not deteriorate the credit metrics of major steel players in India. The leverage metrics of steel companies improved in the financial year 2025-26 (Apr-Mar), "when strong steel prices and rising volumes improved cash flows and led to some deleveraging," according to Bharati. "With a ramp-up in capacities added in the last 12 months and favourable steel prices, we expect the leverage to improve further despite the rising capex intensity," Bharati said. 

 

But the rating agency cautioned in its India steel report that given the significant capacity addition, any prolonged weakness in domestic demand would be a key risk with the resulting overcapacity putting pressure on steel prices and earnings of the top Indian steel companies. Lower steel prices due to a slowdown in domestic demand or prematural removal of safeguard duties could result in the debt-to-EBITDA ratio getting pushed to the 10-year median level of three times, it said.

 

Bharati pointed "any significant weakening in steel prices or increase in import costs could lower the EBITDA per tonne from our base case." "We estimate that a 20% reduction in EBITDA per tonne could increase the leverage of steel companies to long-period median level of about three times," Bharati said, adding that weaker demand due to any slowdown in economic activity could also impact volumes and put further pressure on the leverage metrics.  

 

In its report, the rating agency said it expects the earnings of JSW Steel Ltd., Tata Steel Ltd., Steel Authority of India Ltd., and Jindal Steel Ltd. to increase more than 20% in the financial year 2026-27 (Apr-Mar) as capacity commissioned over the past year continues to ramp up.  End

 

Reported by Astha Oriel and Rajesh Gajra

Edited by Avishek Dutta

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd. by NSE Data & Analytics Ltd., a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt. Ltd.

 

Informist Media Tel +91 (22) 6985-4000

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2026. All rights reserved.