Indian steel prices have softened in recent weeks but retain support from a combination of policy and market dynamics, Morgan Stanley said in a note tracking domestic and imported price relationships.
Hot-rolled coil (HRC) in India was quoted at Rs57,500 per ton, a decline of 4% since the end of March. Rebar prices fell by 7% over the same interval, to Rs48,400 per ton.
Domestic HRC is trading at an 8% discount to import parity prices - a calculation that includes the safeguard duty - up from a 7% discount recorded last week.
On the raw material side, China CFR iron ore for 61% Fe content rose about 3% week-over-week to $112 per ton. Following recent price increases by NMDC this week, domestic iron ore prices are reported to be trading at a 55% discount versus parity, which is close to the five-year average discount of 56%.
Australian hard coking coal prices moved roughly 4% higher during the week to near $240 per ton, representing a 3% increase month-over-month.
Domestic spreads - the gap between local and import-adjusted prices - contracted by around 3% during the week. Despite the pullback, spreads remain approximately 27% above mid-December lows and are approaching the peak seen in April 2025.
Morgan Stanley noted a rise in imports during April. The bank said this uptick has supported inventory restocking, a trend visible in Joint Plant Committee statistics. It expects the restocking cycle to continue as the monsoon season nears and as production ramps up following recent capacity additions.
The imposition of a safeguard duty by the Indian government has been a supportive factor for domestic steel pricing, contributing to the expansion in spreads versus import parity.
Equity market moves reflect some of these dynamics. Steel-sector stocks have climbed about 17% year-to-date, while the broader Sensex index has fallen roughly 9% over the same period. Morgan Stanley anticipates that steel shares could benefit in the near term given that domestic prices are still trading at a discount to import parity.
Note on scope: The observations above are based on the pricing and spread relationships cited, along with Joint Plant Committee data referenced for inventory trends.