India’s domestic steel consumption is anticipated to increase by 9-10% in FY2024-25 as stated in an ICRA report. Demand jumped 15% year on year in the first quarter of FY2025 on account of low priced imports, defying the anticipated seasonal dip in this quarter arising out of the monsoon. Optimal capacity utilization is foreseen at an all-time high of 88% in a decade with an unprecedented capacity addition of 15.6mtpa in FY2025.

The steel sector in India has expanded considerably in the last couple of years as the demand for steel went up by 13.6% in FY2024, nearly the highest of 13.9%, which was recorded in FY2006. The year-on-year growth in these imports continued through FY2023 with a tapering of the economy globally and in China maintaining trade to higher growth demand like India. India’s imports of steel went up by 35.4 percent during the first quarter of FY2025 which led the Indian authorities to initiate an anti-dumping case against Vietnam to curb the surge of steel imports.

After COVID, India’s steel producers have commenced major capacity increases with additions of 26.3mtpa during FY2021 and FY2024 and incremental capacity of 27.5 mtpa expected by FY2027. Imports have dampened the price levels of steel which have been under pressure; however, the steel spread still remains afloat due to falling raw material prices, coking coal which declined by 45% from January to September 2024 particularly. While spreads are expected to contract slightly in Q2 FY2025, they are projected to improve in subsequent quarters as the benefits of lower raw material costs take effect.

For more details : MSN.Com