Safeguard Duties Fuel Steel Price Recovery: Tata Steel Realizations Set for Q4 Boost

Market snapshot: The Indian steel sector is witnessing a significant price recovery following the government's imposition of a three-year staggered safeguard duty on imports. Notified on December 30, 2025, the 12% duty has effectively set a pricing floor, curbing cheap inflows from China and Vietnam. Tata Steel, along with other domestic majors, has leveraged this regulatory tailwind to implement multiple price hikes throughout January 2026, marking a reversal from the pricing pressure seen in Q3 FY26.

Summary: India's new 12% safeguard duty has triggered a steel price rally since mid-December, allowing Tata Steel to raise prices by up to ₹3,500 per tonne and brightening the outlook for Q4 margins.

Key Takeaways

• Government imposed a 12% safeguard duty on flat steel products until April 2026, tapering to 11% by 2028.
• Domestic HRC prices recovered to approximately ₹51,700 per tonne in January, supported by lean inventories and restocking demand.
• Tata Steel reported a Q3 FY26 net profit of ₹2,730 crore, an 825% YoY surge, despite a sequential dip in consolidated revenue to ₹57,002 crore.

SAHI Perspective

The safeguard duty provides a critical 'import parity' buffer of roughly ₹6,500 per tonne, protecting domestic mills from predatory pricing. For Tata Steel, the timing coincides with the commissioning of the 5 MTPA Kalinganagar expansion, positioning the company to capture higher realizations on increased volumes. We expect a significant expansion in EBITDA per tonne for the India business in the upcoming March quarter.

Closing Insight

The alignment of protective trade barriers and domestic capacity expansion suggests a structural improvement in Tata Steel's Indian profitability profile.

High Performance Trading with SAHI.