New Delhi, 13.01.2025: India is expected to grow faster than other major steel-consuming countries in 2025, with steel demand likely to increase by 8-9%, according to CRISIL‘s report.
This growth will be driven by more steel being used in construction for housing and infrastructure, as well as higher demand from industries like engineering and packaging. However, the report also points out concerns about domestic supply, with demand expected to grow by 11% in India.
In 2024, weaker production growth was due to more steel imports and fewer exports. Imports of finished steel went up by 24.5%, while exports fell by 6.4%. This added an extra 3.2 million tonnes of steel to the market, making up 2% of the total demand.
The report also highlights a big increase in steel imports from countries like China, Japan, and Vietnam. For example, imports from China more than doubled, with hot-rolled coils (HRC) imports jumping 28 times. This is important because HRC is used to make other steel products, and these imports are often cheaper than domestic steel, putting pressure on local prices.
Steel prices in India went down in 2024 due to the extra imports. HRC prices dropped by 9%, and cold-rolled coil (CRC) prices fell by 7%, which slowed down the revenue growth of domestic steel producers. However, the decline in coking coal prices helped reduce some of the cost pressure.
Iron ore prices are expected to go up by 9-10%, but coking coal prices fell by 12%. Steel prices in China also went down by 12%, making them cheaper than domestic steel in India.
The report suggests that if the government imposes a safeguard duty on steel imports, prices in 2025 could be higher, especially in the first half of the year.
