Indian steel, raw material prices weaken m-o-m in Jul’26 as monsoon slowdown continues

• • BF rebar records steep 7% decline, HRC drops slightly by 1%

• • Coking coal prices dip on weak demand, ample supply

• • Maintenance shutdowns support 4% uptick in Raipur pellet prices

Morning Brief: Indian steel and raw material prices declined m-o-m in July 2026, extending the correction seen in June as the southwest monsoon slowed construction activity, weakened demand, and increased inventories across the steel supply chain. However, unlike June, market conditions began to stabilize during the second half of July as maintenance shutdowns tightened supply, project bookings improved, and prices of certain raw materials strengthened.

Only pellet prices bucked the broader downtrend, rising on maintenance-led supply tightness despite weaker downstream demand. Pig iron and imported melting scrap prices also remained stable m-o-m.

In the steel segment, long products remained under significantly greater pressure than flats. BigMint’s blast furnace (BF)-route rebar benchmark (exy-Mumbai) recorded the sharpest m-o-m decline of 7%, while induction furnace (IF)-route rebar fell 3%. Billets also weakened, reflecting slower construction activity. In contrast, hot-rolled coil (HRC) prices slipped just 1%, supported by safeguard duty protection, lower imports, and steady manufacturing demand.

Snapshots of domestic steel, raw material price movements:

Iron ore:

Fines, lumps: BigMint’s Odisha iron ore fines (Fe 62%) index declined 2% m-o-m in July, while lumps (Fe 63%) fell 3%. Weaker steel demand, softer downstream prices, and need-based procurement weighed on buying interest. Steelmakers also increased pellet consumption during the monsoon to improve blast furnace productivity, reducing demand for fines.

While the monthly auction from the Odisha Mining Corporation (OMC) witnessed stable bids, NMDC’s July price cut led to bearish sentiment. At the same time, Odisha’s Directorate of Mines and Geology (DMG) restricted dispatches of lower-grade (Fe 55-60%) ore to curb grade misrepresentation, tightening supplies of lower-grade material. However, comfortable availability of Fe 60%+ ore prevented any meaningful recovery in prices.

Pellet: BigMint’s domestic pellet index, PELLEX, DAP Raipur, moved in the opposite direction, rising 4% m-o-m as maintenance shutdowns at several pellet plants and temporary sales closures tightened spot availability, enabling producers to raise offers multiple times. Demand also strengthened from the middle of the month as recovering sponge iron and billet prices improved producer margins and encouraged inventory replenishment.

Buyers also favoured pellets over iron ore lumps due to lower moisture absorption during the monsoon. At the same time, restrictions on lower-grade iron ore dispatches in Odisha shifted some sponge iron producers towards pellets, while export commitments and captive consumption further tightened merchant availability.

Coal:

Coking coal: Premium hard coking coal prices eased 4% m-o-m to $250/t CNF India as weak steel margins and ample inventories with steelmakers (for around 1-2 months) reduced buying interest. Australian supply constraints eased, and domestic met coke prices also remained under pressure, weighing on prices. Meanwhile, China failed to provide sustained support, as domestic coke prices started falling and hot metal production declined.

South African non-coking coal: RB3 (4,800 NAR) non-coking coal prices fell 8-10% m-o-m as declining finished steel and billet prices squeezed sponge iron producers’ margins and led to need-based procurement. Comfortable domestic coal availability and port inventories of 14-15 million tonnes (mnt) further reduced import dependence, with buyers avoiding inventory build-up despite softer imported coal prices.

Ferro alloys:

Silico manganese: Silico manganese prices declined 2% m-o-m in July, driven by weaker steel prices, subdued alloy procurement, and lower manganese ore costs. Ample spot availability intensified competition among producers, while buyers’ resistance to higher offers kept transactions limited and restricted sellers’ pricing power.

Scrap and metallics:

Melting scrap: Domestic melting scrap (HMS 80:20) prices declined 5% m-o-m as weak steel demand and increased sponge iron consumption reduced scrap buying interest. Nevertheless, Indian mills continued to favour domestic scrap over imported material because of its superior cost competitiveness.

Imported shredded scrap remained broadly stable despite extremely weak trading activity, as suppliers had already reduced prices significantly during earlier months. Poor import economics, high freight costs, geopolitical uncertainty in the Middle East, and a weaker rupee kept buyers away from overseas cargoes throughout July.

Sponge iron: Sponge iron prices averaged 1-2% lower m-o-m in July, although they recovered sharply during the second half of the month. Early-month weakness reflected lower rebar prices and sluggish procurement. Later, tighter pellet availability and constrained domestic coal supplies lifted production costs, allowing producers to raise offers despite only a modest improvement in demand.

Pig iron: Pig iron prices, ex-Durgapur, remained broadly stable m-o-m in July. Strong export bookings secured in previous months kept domestic availability tight, while higher pellet prices and tighter sponge iron supplies encouraged some consumers to substitute pig iron, preventing any meaningful price correction.

Steel:

Billets: Billet prices declined 2% m-o-m. Demand from secondary rebar producers weakened during the first half of July as construction activity slowed. Although firmer sponge iron prices supported a partial recovery towards the month-end, the rebound was insufficient to offset earlier declines.

IF rebar: IF-route rebar prices, ex-Mumbai, fell 3% m-o-m, as monsoon-driven disruptions kept construction demand weak, with procurement remaining largely need-based. Mills continued offering discounts during the first half before market sentiment improved towards the month-end as rainfall eased. Higher sponge iron prices, due to the uptick in pellets, and firmer billet offers, driven by tight scrap supply, also helped stabilise prices in late July. However, the rebound was insufficient to offset earlier weakness, leaving monthly average prices lower than in June.

BF rebar: BF-route rebar, ex-Mumbai, recorded the steepest decline among finished steel products, falling 7% m-o-m. Primary producers repeatedly reduced prices during the first three weeks as inventories accumulated and project bookings slowed. Market sentiment improved only towards the month-end after maintenance shutdowns tightened spot availability, distributor inventories declined, and project procurement recovered. Even so, the late rally could not offset the sharp correction earlier in the month.

HRC: HRC prices declined just 1% m-o-m, as trade channel demand remained subdued as buyers limited procurement to immediate requirements amid liquidity constraints and comfortable inventories. However, the safeguard duty, low imports, the anti-dumping investigation into HRC imports, and steady demand from OEMs prevented a sharper correction. By the end of July, planned maintenance shutdowns and higher mill list prices had begun to improve market sentiment.

Outlook:

Indian steel prices appear to have bottomed out in late July after nearly two months of correction. BigMint expects maintenance shutdowns at several integrated steel plants to keep spot supplies tight during August, while improving project execution after the peak monsoon period should gradually lift long steel demand. Major integrated mills have already raised rebar list prices by INR 1,000-2,000/t ($11-21/t) for August.

Meanwhile, HRC is expected to remain relatively stable after mills increased August list prices by INR 750-1,500/t ($8-16/t). Prices may remain supported by policy protection, lower import competitiveness, and steady manufacturing demand.

Rising pellet prices and firmer sponge iron costs are also likely to provide additional support to secondary steel prices. Pellet prices should stay elevated due to maintenance shutdowns and limited spot availability, while South African RB3 coal prices may stabilise as domestic coal auction frequency declines during the monsoon.

Iron ore prices may also remain firm. Monsoon rains are expected to keep mine dispatches slow, while steady procurement by private miners should support prevailing prices.