Steel Prices in 2025 Set to Rise With Safeguard Duty
Steel prices in India could witness a significant hike in 2025 if the proposed safeguard duty on steel imports is enforced by the end of February, according to a report from the rating agency, Crisil. The anticipated duty is expected to support domestic steel prices, which have been under pressure due to global steel price declines and an influx of imports. If implemented as planned, the safeguard duty could increase domestic steel prices by 4-6 percent in 2025, especially in the first half of the year.
In 2024, domestic steel prices experienced a downturn, driven by a rise in imports, which increased the availability of steel in the Indian market. This surge in imports led to a reduction in the prices of products like hot-rolled coils (HRC) and cold-rolled coils, which saw a 9 percent and 7 percent decline, respectively. These declines contributed to slower topline growth for domestic steel mills, which faced the dual challenge of declining prices and rising competition from imports. However, falling coking coal prices have provided some relief to domestic steel producers, allowing them to mitigate margin pressures to an extent.
Despite this, the safeguard duty has the potential to counteract the softer pricing trend in 2025 by creating a protective barrier for Indian steelmakers from cheaper imports. The implementation of the duty would support domestic steel prices and help balance out the global volatility that has been a concern in recent months. The proposed safeguard duty could provide a much-needed boost to the domestic steel sector, which has been facing a challenging environment. By reducing reliance on cheaper imports, the duty would provide domestic manufacturers with better pricing power, helping to stabilise the market. The impact of this move is likely to be most visible in the first half of 2025, as the domestic steel sector adjusts to the new pricing landscape.
