Steel price hike likely in March quarter; JSPL, JSW top picks: Axis Securities

Another round of steel price hikes could be approaching, with private steel makers better placed than public sector undertaking (PSU) peers, according to Aditya Welekar, Senior Research Analyst–Metals at Axis Securities.

He expects seasonal demand recovery and easing import pressure to support domestic prices.

“Q4, the January-March quarter of 2026 (Q4FY26), is a seasonally strong quarter, usually for metals, and steel in particular… in March, we could see… price hikes. It cannot be ruled out at this point.”

Import competition has reduced significantly.

“On an import parity basis, we are almost at parity with the Chinese imported steel prices… earlier… the steel prices were trading at a discount of 12%.”

Margins are also likely to improve despite higher input costs, as rising steel prices should offset coking coal increases.

“Hot rolled coil (HRC) prices have increased by almost ₹4,500 to 5,000 per tonne… overall, spreads could likely increase by ₹3,500 to 4,000 per tonne in Q4 as compared to Q3, the October-December quarter of 2025 (Q3FY26).”

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Welekar prefers private players, while seeing Steel Authority of India (SAIL) mainly as a tactical opportunity.

“Jindal Steel and Power, JSW Steel, followed by Tata Steel, and then by SAIL, will be my pecking order.”

SAIL could benefit from stronger volumes and long steel prices in the near term, but expansion plans add medium-term risk.

“In the shorter term, can be a trading bet… but in the longer term… it is expanding its capacity from 20 to 35 million tonne… the capex intensity will rise.”

At the sector level, he currently favours steel companies over non-ferrous metals after the rally in base metal stocks.

“Ferrous looks slightly better placed. Non-ferrous, we have seen a good rally. So, the valuations have caught up a bit.”

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Among base metals, aluminium has stronger near-term fundamentals due to supply disruptions, while copper may consolidate because of higher inventories.

“Aluminium fundamentally looks slightly more sound than copper at this point… copper, we may see a medium-term supply slightly exceeding the demand.”

Over the longer term, he remains constructive on both metals.

For the entire interview, watch the accompanying video

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