Steel producers set for strong Q4, despite a minor blip from West Asia war

Domestic steel prices have climbed sharply following the imposition of safeguard duty on imports in December. The war has further disrupted key trade routes, lifting freight costs and, along with rupee depreciation, increasing the pressure on imports.The spot price of hot rolled coil (HRC) has risen about 22% over its Q3FY26 average to ₹57,700 per tonne, but still remains below the landed cost of imports from China, giving domestic producers an advantage, according to a Nomura Global Market Research report.For Q4FY26, the average HRC price stood at ₹53,866 per tonne — a 14% sequential increase.

Rebar (long products) prices rose even more sharply, up 21% sequentially to ₹57,196 per tonne. This bodes well for Jindal Steel Ltd, where long products account for over half of sales volumes.On the cost front, iron ore prices were largely stable during the quarter.

However, the price hike taken by NMDC in March is likely to hurt profitability in the June quarter.Meanwhile, coking coal costs rose by $15–20 per tonne (around ₹1,400–1,900) in Q4FY26, partially offsetting gains from higher realizations.Steelmakers are also expected to report robust offtake in the seasonally strong March quarter.According to Joint Plant Committee data, domestic finished steel consumption grew 8.8% year-on-year in the first two months of Q4FY26, compared with a modest 3.9% growth in Q3FY26.Imports fell about 40% during the period, while exports jumped 50%. That said, exports still account for a modest 4% of total output.Higher spreads and operating leverage are expected to lift Ebitda per tonne by around ₹4,500 sequentially in Q4, according to JM Financial Institutional Securities.Tata Steel Ltd could also benefit from firming European prices following