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Surplus supply, weak prices offset healthy consumption outlook.

Steel Demand Seen Growing 8% in FY26, Margins to Stay Under Pressure: Icra.                                                                                                                                                                                                   

India’s domestic steel demand is expected to grow by around 8% in FY26, supported by infrastructure and construction activity, but pressure on prices will keep profitability subdued, rating agency Icra said. The agency projects industry operating margins to remain flat at about 12.5% in FY26, lower than earlier expectations of an improvement. According to Icra, incremental capacity additions have created a temporary supply surplus, weighing on prices. Domestic hot-rolled coil (HRC) prices, which surged after the imposition of safeguard duty in April 2025, have since corrected and are trading below import parity. Global prices have also softened due to record Chinese steel exports, which touched 88 million tonnes in the first nine months of CY2025. While India’s finished steel imports have fallen sharply year-on-year, Icra stressed that continuation of safeguard duties is crucial to prevent import-led price pressure. For FY26, domestic HRC prices are expected to average around ₹50,500 per tonne, with operating profit per tonne seen slightly lower than last year. The sector outlook remains ‘Stable’, though Icra cautioned that aggressive capacity expansion plans could strain balance sheets unless earnings improve