Steel prices may stabilise in Q4FY26

THE COMPASS

- DEVANGSHU DATTA

Conflicting trends in the steel industry make it hard for investors to take definitive calls.

The world’s largest steel producer, China, is also the world’s largest exporter. Due to its weak macroeconomy and in particular, the weak real estate sector, China has large surplus steel production, and it has flooded markets with cheap exports.

In India, domestic steel demand is growing steadily. But prices are low due to the overhang of imports, despite measures to protect domestic industry such as import duties, including safeguard duties (which have ended but may be reimposed) and anti-dumping duties, and also non-tariff barriers like stringent QCOs (quality control orders).

QCOs, which cover as many as 160 imported steel products, create bottlenecks for downstream industries that depend on imports for special steels which are not made domestically. Niti Aayog has recommended the removal or easing of QCOs on 112 steel products.