Steel cos' pricing power to remain under pressure: Analysts

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26 Aug, 2025 12:21

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Despite the price hikes by steel companies in recent months, their pricing power is likely to stay under pressure in the near-term on the back of demand-supply mismatch seen in the first nine months of the current financial year, industry experts said.They also said any price hike announced by the steel companies in the recent times will be compensated through deep discounts to customers."Pricing power of steel companies will remain under pressure in the near-term due to subdued demand environment. While there is a large inventory of long-products, inventory is lesser in case of flat products due to rising exports," senior analyst at Angel Broking Bhavesh Chavan told PTI.An analyst from India Ratings said real pricing power would come with revival in demand."For price hikes to be sustainable, there has to be a significant improvement in steel demand from end-user industries...steel demand has remained weak during the last 10-12 months," Director for corporate ratings at India Ratings Ashish Upadhyay told this agency.Chavan also said that despite the price hike by some companies in the recent past, they would not be able to hold on to it due to low demand."Discounts will be offered to the customers, which will somewhat nullify the impact of price hike announced by them," Chavan said.Recently, Icra said in a report that domestic demand is likely to grow at a slower pace in the current fiscal than 3.3 per cent growth rate achieved in previous financial year, notwithstanding a typical pick-up in demand in the last quarter. It also said double-digit production growth rates by several large steel companies in the April-December period is creating a mismatch in domestic supply and demand situation."Unless demand environment improves, such price hike by steel companies is not sustainable," Icra Senior Vice-President and co-head Jayanta Roy said.Most steel firms have increased prices of steel products in the last few months on the back of rise in cost along with uptick in demand in the first two months of this year.