India’s steel demand is projected to rise by 8-9% in 2025, driven by robust growth in the residential and infrastructure sectors, as well as increased use in engineering, packaging, and other industries.
Key Drivers of Growth
- Construction Boom: A shift towards metal-intensive construction in residential and infrastructure projects.
- Broader Sector Demand: Expansion in engineering and packaging segments is further fueling demand.
Concerns About Domestic Supply
Despite demand growth, challenges in domestic supply persist:
- Indian plants reported only a 5.2% y/y supply growth in 2024 due to maintenance periods.
- The top seven steel producers increased total output by just 0.05%, with rolled steel production rising by 0.5%.
- Medium and small players stepped up, with steel output up 4% and rolled products up 11.3% y/y.
Steel Prices to Rise in 2025?
Crisil predicts steel prices may increase if India implements a proposed safeguard duty on steel imports, aimed at curbing cheap Chinese imports. In 2024, prices fell:
- Hot-Rolled Coils (HRC): Down 9% y/y.
- Cold-Rolled Steel: Down 7% y/y.
Policy Moves to Protect Domestic Producers
India is preparing to introduce a temporary safeguard duty of up to 25% on steel imports, aiming to support local manufacturers against low-priced Chinese imports.
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