New Delhi [India], June 10 : Indian steel companies are likely to experience an uptrend in the first quarter of 2026 owing to the recently imposed 12 per cent safeguard duty on flat products in April, according to a recent report by JM Financial.
The Government of India had imposed a 12 per cent safeguard duty in April, with an aim to protect the domestic steel industry from a sudden and sharp increase in steel imports.
The government has set minimum import prices for five steel product categories ranging from USD 675 per tonne to USD 964 per tonne. Any shipment imported below these prices will attract a 12 per cent safeguard duty.
According to the report, "Indian steel companies are expected to witness margin expansion to the tune of approx. INR 2k/t in 1QFY26."
Indian steel companies' margins are expected to be partly offset by elevated iron ore prices and lower scale during the quarter.
Furthermore, the report also highlights that amid the US tariff drama, Indian steel companies arguably have a relatively better spot margin construct than their non-ferrous peers, given the recently imposed safeguard duty.
The report also says, "As per news articles, the government is further considering the possibility of increasing the safeguard duty to 24 per cent from 12 per cent currently, which shall further protect domestic players from countries dumping cheap steel in India."
In contrast, Chinese steel prices remain subdued, with spot HRC and rebar prices down USD 22/t and USD20/t respectively.
Weighing on global steel prices, China's steel exports for CY24 surged to 111mn tonnes, up nearly 22 per cent on a year-on-year basis, and exports for Apr'25 came in at 10.5mn tonnes (+13 per cent YoY).
China recently announced its intention to reduce domestic steel production, and any meaningful implementation of this measure could support prices.
On the global level, steel making raw materials experienced a muted quarter, weighed down by supply disruptions in Australian mines while China's average iron ore prices corrected by USD4/t compared to 4Q.
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