Safeguard duty extension lifts outlook for steel sector in 2026: Antique

Antique said it prefers steel companies with strong market presence, higher raw material integration, low leverage and greater exposure to the domestic market

India's steel sector has begun 2026 on a positive note, supported by resilient domestic demand and the government’s decision to extend safeguard duties on key flat steel products, Antique Stock Broking said in a note.

 

Provisional data from the Joint Plant Committee shows domestic finished steel consumption rose 7.4 per cent year-on-year (Y-o-Y) to about 105.2 million tonnes during April-November 2025, the brokerage said in a report. 

 

However, pressure on global steel prices persists due to higher Chinese exports, which increased 6.3 per cent Y-o-Y to 107.7 million tonnes during January-November 2025.

 

Antique noted that the government has extended safeguard duties on select flat steel products for three years at tapering rates of 12 per cent until April 2026, 11.5 per cent until April 2027 and 11 per cent until April 2028. The brokerage said the move should support realisations of domestic producers and curb imports. Finished steel imports fell 36.3 per cent Y-o-Y during April-November 2025, as per provisional Joint Plant Committee data.

 

 

In anticipation of the safeguard duty extension, domestic steel prices have recovered on a month-on-month (M-o-M) basis. Hot-rolled coil prices rose 5.5 per cent, cold-rolled coil prices increased 2.1 per cent and rebar prices gained 5.8 per cent. Spot hot-rolled coil prices are currently trading at a discount to Chinese import parity prices, Antique said.

 

Antique Stock Broking noted that while the third quarter of the financial year 2026 (FY26) is likely to be impacted by softer steel prices, the fourth quarter is seasonally the strongest in terms of demand and could provide further support to domestic prices. However, the brokerage cautioned that the upside may remain limited due to new capacities coming on stream or ramping up, along with weak global steel prices. It pointed out that hot-rolled coil prices saw only a marginal uptick when provisional safeguard duties were imposed in April 2025. 

 

The brokerage said it prefers steel companies with strong market presence, higher raw material integration, low leverage and greater exposure to the domestic market. 

 

Jindal Steel, which has about 49 per cent exposure to flat products, has recently commissioned a 4.6 million tonne per annum blast furnace and a 3 million tonne per annum basic oxygen furnace at its Angul plant in Odisha. The company is targeting an exit liquid steel capacity of 15.6 million tonnes per annum and finished steel capacity of 13.8 million tonnes per annum by the financial year 2027.

 

Tata Steel, which derives around 75 per cent of its portfolio from flat products, is ramping up its 5 million tonne per annum blast furnace and 2.2 million tonne per annum cold rolling mill complex at Kalinganagar. Antique said these additions should aid volume growth and improve product mix, while cost optimisation initiatives could help partially offset weaker steel prices.  ========== 

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