New Delhi, Jan. 6 -- India's extension of safeguard duties on select steel products will set a pricing floor for imports, but its effectiveness in supporting higher prices ultimately hinges on a recovery in domestic demand, according to a report by S&P Global Ratings.

In S&P's view, a sustained improvement in industry credit metrics will require demand-led price support.

"While the extension of safeguard duties raises the import parity price on steel, a sustained improvement in demand will be crucial to support domestic pricing," said S&P Global Ratings credit analyst Anshuman Bharati in the report titled "India Steel Brief: Duties Raise The Floor, Demand Sets The Ceiling."

The Indian government has extended safeguard duties on steel i...