Steel Price Surge Sets Off Alarm Bells For Msmes: Cicu Seeks Immediate Government Intervention

Sep18,2026 | Jagrati Lahar Bureau | Ludhiana

Sharp rise in HRC, CRC and Rebar prices threatens margins, working capital and export competitiveness of downstream industries

The Chamber of Industrial & Commercial Undertakings (CICU) has raised serious concern over the sharp and broad-based increase in domestic steel prices, warning that the escalation is placing renewed pressure on the cost structure of thousands of downstream MSME manufacturers across Punjab and other industrial clusters.

According to the latest sector assessment by Motilal Oswal Financial Services, domestic HRC prices have increased 7% month-on-month to around ₹62,000 per tonne in September, a four-year high, while CRC prices have risen 8% to around ₹70,500 per tonne. Rebar prices have also climbed sharply to approximately ₹56,800 per tonne, compared with ₹48,850 per tonne in June. The brokerage has attributed the firm pricing environment to lean channel inventories, maintenance-related supply constraints and higher input costs. Premium Australian coking coal has reportedly increased to around US$300 per tonne from US$260 per tonne in June, while iron ore and pellet prices have also remained firm.

“MSMEs cannot absorb repeated steel price shocks” — CICU

CICU President Sh. Upkar Singh Ahuja said the issue has become particularly serious for downstream industries that operate on tight margins and have limited bargaining power to immediately transfer every increase in raw-material costs to their customers. “Steel is the backbone of a large section of India's manufacturing ecosystem. The present increase is not an isolated cost movement for MSMEs—it directly affects product costing, working capital, order commitments and export competitiveness. When raw-material prices rise sharply after an order has already been accepted, an MSME cannot simply revise its price overnight. The Government must therefore closely monitor the situation and ensure that the downstream manufacturing sector does not bear the disproportionate burden of the price escalation.”

The latest industry assessment also points to a widening gap between steel consumption and production growth. Motilal Oswal reported finished-steel consumption of about 70.3 million tonnes during April–August 2026, up 7.2% year-on-year, against finished-steel production of around 67.4 million tonnes, up 3.7%.

J.S. Bhogal: “Immediate relief is needed before the cost shock reaches every MSME supply chain” CICU Sr. Vice President Sh. J.S. Bhogal said the current situation requires urgent attention because steel is a fundamental input for engineering, auto components, fasteners, bicycles, hand tools, machinery, fabrication and several other manufacturing segments.

“The sharp escalation in steel prices has set off a serious warning for the downstream MSME sector. Thousands of manufacturers are already operating under intense pressure from labour, power, logistics, finance and other input costs. A further sharp increase in steel prices directly squeezes their margins and locks up additional working capital. We strongly urge Hon’ble Union Minister Shri Piyush Goyal Ji to kindly look into this matter on priority and consider immediate, practical relief measures for steel-consuming MSMEs, similar to the timely intervention and support extended by the Government in the earlier anti-dumping/trade-remedy matter. MSMEs should not be placed in a situation where they have to choose between accepting losses and losing orders. We need a balanced steel market that protects the competitiveness of downstream manufacturers while maintaining the strength of India's steel industry.”

CICU urges Centre to examine immediate measures

CICU has requested the Ministry of Commerce & Industry and Ministry of Steel to jointly examine the present steel-price situation, particularly its impact on downstream MSMEs and export-oriented manufacturers. The Chamber has urged the Government to consider:

· Continuous monitoring of domestic steel prices and availability;

· Assessment of the impact of steel-price increases on downstream MSME manufacturing;

· Examination of appropriate trade-remedy or trade-policy measures wherever supported by market data and DGTR findings;

· Ensuring adequate availability of essential steel grades for downstream industries;

· Assessment of the impact of higher steel costs on India's export competitiveness;

· Consultation with MSME associations and downstream steel-consuming industries before major policy interventions.

CICU emphasised that its demand is not for artificial price control, but for a balanced and predictable market in which downstream manufacturers can compete effectively.

CICU seeks urgent industry–Government consultation

The Chamber has requested an early consultation involving the Ministry of Commerce & Industry, Ministry of Steel, DGTR and representatives of downstream MSME sectors to examine the causes and impact of the recent price escalation and identify practical measures. The concern comes at a time when India is also dealing with evolving trade-remedy measures concerning steel. DGTR records show, for example, that an anti-dumping investigation concerning hot-rolled flat products of alloy or non-alloy steel from China PR, Japan and Russia was initiated in June 2026.

CICU said that policy measures must take into account both sides of the steel value chain—primary steel producers as well as the thousands of downstream MSMEs whose competitiveness depends on affordable and predictable access to steel.

“The time to act is now”

CICU President Sh. Upkar Singh Ahuja added: “Our MSMEs are ready to expand production, create employment and contribute to exports, but competitiveness cannot be sustained if critical raw materials become increasingly unpredictable in price. We therefore appeal to the Government to intervene through a structured and data-driven review before the present steel-price pressure becomes a wider manufacturing and export challenge.” CICU has urged the Government to treat the matter as an immediate MSME competitiveness issue and initiate a dialogue with industry at the earliest.

“The Government must ensure that the domestic steel market does not become excessively concentrated in the hands of 5–6 major players, as limited competition can place downstream MSMEs at a significant disadvantage in terms of price discovery, availability and bargaining power.”

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