Steel stocks are set for a volatile session on Friday, September 18, after Motilal Oswal flagged a sharp reversal in domestic pricing trends. The brokerage notes that despite seasonal demand dips, prices have firmed up significantly, with hot-rolled coil (HRC) hitting ₹62,000 per tonne in September 2026—a level not seen in four years. Cold-rolled coil followed suit, climbing 8% month-on-month to ₹70,500 per tonne, signaling broad-based strength across flat and long products.
The driver here isn’t just demand; it’s the cost curve. Input costs have ballooned, forcing manufacturers to pass through expenses. Premium Australian coking coal jumped to $300 per tonne from $260 in June, while iron ore and pellet prices remain sticky. This cost inflation, combined with maintenance-led supply constraints and lean channel inventories, has squeezed margins for traders but supports realizations for producers like JSW Steel and Tata Steel.
Domestic fundamentals remain robust, even as global headwinds persist. India’s finished steel consumption grew 7.2% year-on-year to 70.3 million tonnes between April and August 2026, outpacing production growth of 3.7% to 67.4 million tonnes. Contrast this with China, where output fell 3.1% YoY, and global crude steel production dipped 0.6% to 1.08 billion tonnes in the first seven months of 2026. The divergence suggests India is decoupling from the weaker global cycle.
Motilal Oswal expects this strength to carry into the second half of FY27, assuming post-monsoon demand normalizes as expected. The brokerage warns that current consensus models may underestimate this pricing resilience, positioning domestic majors for better-than-expected earnings. For traders, the signal is clear: the sector is entering a stronger realization environment, with JSW Steel and Tata Steel as the primary beneficiaries of this structural shift.