The Indian Steel Industry is poised for a robust growth trajectory, with domestic steel consumption expected to rise by 9-10% in the financial year 2025, according to ICRA’s recent statement. This projection highlights a positive outlook for the industry despite global market fluctuations.

Strong Performance in Q1: In the first quarter of the current financial year, steel demand surged by 15% year-on-year, driven by competitively priced imports. This strong start reflects the resilience and growth potential of the domestic steel market.

Seasonal Trends and Future Projections: While the current quarter might experience a slight slowdown due to seasonal effects from the monsoon, a rebound is anticipat as government capital expenditures are expect to increase towards the end of the financial year.

High Capacity Utilization: ICRA forecasts that the steel industry will achieve a decade-high capacity utilization rate of 88% in FY2025. This comes despite unprecedented capacity additions totaling 15.6 million tonnes per annum (MTPA) and a rise in steel imports.

Historical Growth Trends: The steel sector is currently undergoing its most rapid growth phase since the global financial crisis. In FY2024, the industry saw a consumption growth of 13.6%. Approaching the peak of 13.9% recorded in FY2006, a period marked by significant private sector investment.

Impact of Global Market Conditions: As a globally traded commodity, steel’s domestic performance is influenc by international market conditions. With slower economic growth in major steel-producing countries like China, trade flows have shifted towards high-growth markets such as India. This shift has led to a steady increase in domestic finished steel imports since FY2023.

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