New Delhi, Sept. 8 -- Domestic steel prices are heading north, aiding the sector's earnings prospects. The spot price of hot-rolled coil (HRC) hit a four-year high in September, supported by strong demand from the automotive sector. Rebar prices, which tend to face greater pressure in a seasonally weak second quarter amid muted construction activity, have risen as maintenance shutdowns have tightened supply.

Domestic HRC prices reached Rs.62,000 per tonne for the week ended 4 September, up 25% year-on-year and about 6% higher than June figures, according to Nomura Global Markets Research. Rebar prices at Rs.57,000 per tonne are up 20% year-on-year, but marginally lower than June.

Nonetheless, prices are likely to remain firm on robust d...