Nomura stays bullish on India steel as rebar recovery continues, HRC prices remain firm

• India steel prices strengthen; rebar, flat steel resilient.
• Domestic HRC, rebar prices rose significantly.
• Nomura maintains positive outlook on India steel sector.

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India steel prices continued to strengthen in the week ended August 28, with rebar sustaining its recovery and flat steel prices remaining resilient, Nomura said in its latest India steel weekly report.

Domestic HRC prices rose Rs 1,200 per tonne week-on-week to Rs 59,750 per tonne, while rebar prices rebounded Rs 1,050 per tonne to Rs 54,750 per tonne, extending the improvement after a prolonged three-month correction.

“Despite the correction, the domestic flat-long spread remains positive at over Rs 5,000/t, supported by sustained resilience in HRC prices over rebar prices,” Nomura said. India’s HRC spot margin stood at around Rs 35,838 per tonne in August, improving by around Rs 1,117 per tonne month-on-month.

In China, export HRC prices were unchanged at $495 per tonne, while domestic HRC prices increased $9 per tonne week-on-week to $498 per tonne. Export margins moderated by $17 per tonne to $191 per tonne amid higher global coking coal costs.

European HRC prices increased by EUR 5 per tonne week-on-week to EUR 710 per tonne, while margins declined by EUR 15 per tonne to EUR 449 per tonne due to higher global coking coal costs.

Coking coal prices surge

Imported coking coal prices increased $24 per tonne week-on-week to $259 per tonne, the highest level year-to-date, driven by renewed supply concerns, including disruptions at key producers, geopolitical tensions and a fatal mine accident in China.

“Notably, domestic Chinese coking coal prices have risen over 30% since the accident to a spot price of $320/t,” Nomura said.

Global iron ore prices remained stable at around $93 per tonne, close to the lowest level seen in 2026 so far. In India, NMDC reduced lump and fine prices by Rs 200 per tonne each in August to Rs 5,250 per tonne and Rs 4,500 per tonne, respectively.

China property reforms structurally positive

Nomura said China’s new property policy package represents a structural shift from a presales model to a completed-sales model, under which homebuyers pay only after project completion while greater funding risks shift to developers and financial institutions.

“We view the reforms as structurally positive, as they should improve homebuyer confidence and reduce delivery risks over the long term, with limited near-term demand as property investment stays depressed and developers remain financially stretched,” Nomura said.

For Indian steelmakers, subdued Chinese demand could keep mills more dependent on exports, increasing the risk of China-led dumping pressure. However, Nomura said India’s safeguard duty regime, currently at 11.5% and tapering to 11% through April 2028, remains an important offset.

“India’s safeguard duty regime, (11.5% tapering to 11% through April 2028) remains an important offset, providing greater protection to domestic realisation than any China-side recovery, in our view,” it said.

Coal supply stress raises power cost risks

India’s thermal power plants consumed 59.46 million tonnes of coal during August 1-23, against receipts of 52.93 million tonnes, resulting in a 6.53 million tonne supply deficit. Inventories fell 15.5% to 31.95 million tonnes, or just 52% of normative requirements, according to BigMint data cited by Nomura.

The imbalance intensified in the second half of August, with daily coal burn rising to 2.61 million tonnes while receipts declined to 2.26 million tonnes, widening the daily deficit to 0.36 million tonnes.

Nomura said plant-level shortages were concentrated around rail bottlenecks, unloading constraints and dependence on specific Coal India subsidiaries and captive mines, with several plants operating at critically low stock levels.

“While 2Q is usually not a high power-demand period, persistently low power-plant inventories could drive higher domestic thermal coal prices and power costs,” Nomura said, adding that this could affect the non-ferrous sector, particularly aluminium, given its high energy intensity.

Nomura maintains positive stance

“We maintain our positive outlook on the India steel sector,” Nomura said, adding that the domestic steel industry is well positioned to benefit in 1HFY27F from price hikes implemented in late 4QFY26 and through 1QFY27.

The brokerage believes these price increases are “more than sufficient to absorb any cost inflation arising from the West Asia crisis” and maintained its positive stance on the sector.

Nomura maintained its Buy recommendation on the India steel sector.