PTI New Delhi

Steel prices in 2025 would be much higher than the last year if the proposed safeguard duty on steel imports is imposed by the end of next month, rating agency Crisil said on Wednesday.

"Domestic prices are under pressure due to global steel price decline and are expected to remain soft in 2025. Prices have a 4-6 per cent upside potential hinged on implementation of the safeguard duty. 

"As mills ramp up production volume from the newly commissioned capacities, increase in supply will reduce flat steel prices, but will still be higher than average price of 2024. That said, intense competition among mills to gain market share could limit the upward movement," Vishal Singh, Director-Research at Crisil Market Intelligence and Analytics, said in a statement.

The imposition of a safeguard duty proposed by the industry could be a positive here. Assuming it is implemented by the end of February, steel prices in 2025 would be much higher than 2024, with the impact more prominent in the first half, the statement said.

Last year, steel prices in the domestic market declined due to additional availability of the metal backed by an increase in net imports. Hot-rolled coil (HRC) prices declined nine per cent and cold rolled coil prices declined seven per cent, thereby slowing topline growth of domestic mills. 

However, falling coking coal prices, along with low volatility, have helped domestic steel producers reduce margin pressure to some extent. 

Coking coal spot price for the premium low volatility grade, Australia-origin, declined 12 per cent in 2024, whereas iron ore prices are estimated to have increased by 9-10 per cent during the period.