India: A Beacon of Steel Market Growth Amid Global Slowdown
India emerges as a key growth market for steel from 2019 to 2024. Despite a global decline, India reports a 33% increase in steel output, with robust growth in other commodities. Challenges such as pricing pressure have been addressed through government intervention, maintaining a positive outlook for the industry's future.
- Country:
- India
India stands out as a robust growth market for steel, becoming the only major country to report significant volume growth from 2019 to 2024, according to a Jefferies report. While global steel production dipped by one percent during this period, India's steel output surged by a remarkable 33 percent.
The Jefferies report highlights India as a bright spot in a global landscape largely devoid of volume growth in commodities. India not only led in steel but also demonstrated consistent volume growth across major commodities, including carbon steel, stainless steel, coal, and aluminum.
Over the past 15 years, India's consumption of carbon and stainless steel has grown at an impressive compound annual growth rate (CAGR) of 7-8 percent, which is significantly higher than the real GDP growth in the same timeframe. Looking to the future, Jefferies anticipates an 8-10 percent volume CAGR for Indian steel companies between FY25 and FY27, supported by rising power demand driving coal volumes at a 5 percent CAGR.
Additionally, aluminum demand in India has grown steadily at a 7 percent CAGR from 2017 to 2024, with similar trends expected across commodities through FY25 to FY27. Nevertheless, the domestic steel market encountered pricing challenges in the latter half of 2024 due to falling Chinese steel prices and increased imports into India, causing domestic hot-rolled coil (HRC) steel prices to drop by 15 percent from June to December 2024.
In response, the Indian government implemented a 12 percent safeguard duty on flat steel imports in April 2025, effective for 200 days, with a final review projected between August and September of this year. This measure led to a rebound in steel prices, with a 14 percent rise to Rs 53,500 per tonne year-to-date, positioning prices 5 percent above imported costs.
Jefferies forecasts that Indian steel prices will average between Rs 52,000 and Rs 53,000 in FY26 and FY27, slightly trailing the current spot price by 1-3 percent. Overall, the outlook for Indian steel companies remains favorable, as the nation continues to drive global demand in a predominantly slow-moving commodities market.
(With inputs from agencies.)
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