Metal prices firm up in August, but rising input costs cloud recovery

Metal prices firmed across major segments in August even as demand conditions stayed uneven, with the sustainability of the recovery hinging on how input costs move in the coming months.

Domestic steel prices staged a notable rebound. Rebar rose nearly 10 per cent month-on-month after a sharp slide over the preceding three months, and was up about 12 per cent year-on-year. Hot-rolled coil (HRC) prices gained around 2 per cent month-on-month and about 19 per cent year-on-year.

The rebar surge was aided by planned maintenance shutdowns at integrated steel plants, suspension of fresh bookings, lower inventories, tighter supply and healthy demand. HRC prices drew support from limited availability, controlled dispatches and stronger demand from the Middle East, while domestic offtake remained largely need-based.

Globally, HRC prices climbed roughly 3 per cent month-on-month each in the US and Europe, whereas China's export HRC prices were broadly flat.

Raw material trends were mixed. Australian iron ore prices slipped about 2 per cent month-on-month and 3 per cent year-on-year, and NMDC announced its second consecutive price cut of CY26 during the month. In September, however, NMDC raised lump prices by Rs 150 per tonne while leaving fines unchanged.

Global crude steel output was broadly stable year-on-year but fell about 4 per cent month-on-month to 149.2 million tonnes in July. China's production declined around 4 per cent year-on-year, while output in the rest of the world rose 3 per cent. India stayed resilient, with crude steel output up 3 per cent year-on-year and 2 per cent month-on-month at 14.4 million tonnes.

Among non-ferrous metals, aluminium recovered after two months of correction, rising about 3 per cent month-on-month to USD 3,251 per tonne in August and holding 25 per cent higher year-on-year. Zinc and copper gained around 8 per cent and 6 per cent month-on-month respectively, while lead and nickel each rose about 1 per cent.