Representative image showing steel.
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New Delhi: Bucking global slump, India steel demand is likely to increase by 8-9% in 2025 over the previous year, driven by a shift towards steel-intensive construction in the housing and infrastructure sectors along with better demand from engineering, packaging and other segments, CRISIL said on Wednesday.
Domestic supply, however, remains a point of concern. "In 2024, supply growth from India’s mills was benign at 5.2%, with extended periods of planned and maintenance shutdowns," said Sehul Bhatt, Director-Research at CRISIL Market Intelligence and Analytics.
Aggregate crude production by the top seven players increased by a paltry 0.05%, while finished steel production increased by 0.5% in 2024 over the previous year. However, crude and finished steel production from medium and small players increased 14% and 11.3%, highlighting the consistent demand growth from long steel end-users.
Muted domestic supply has led to a huge jump in imports. India’s steel imports surged by 41% to 4.7 million tonnes in the first six months of the current financial year, while exports dipped by 36% to 2.31 million tonnes during the same period.
Steel demand in India increased by 11% in 2024 over the previous year, whereas the overall global steel demand declined by 1% during the year.
In 2024, demand in China, the largest steel producer and consumer, declined 3.5%, led by declining steel demand from the real estate sector, despite conducive policy changes and release of support packages.
Steel demand from Europe, Japan and the US also logged an estimated demand de-growth of 2-3%. “However, demand growth in developing economies such as India and Brazil kept global demand from declining steeply,” CRISIL said in a research note.
In 2025, global steel demand is expected to inch up by 0.5-1.5% on the back of easing financing conditions and pent-up demand from some key steel consuming economies.
Meanwhile, steel price in the Indian market declined sharply in 2024 and is expected to remain soft in the current year also. Price of hot-rolled coil dipped by 9% and cold rolled steel by 7% year-on-year in 2024.
"Domestic prices are under pressure due to global steel price decline and are expected to remain soft in 2025. Prices have a 4-6% upside potential hinged on implementation of the safeguard duty," said Vishal Singh, Director-Research at CRISIL Market Intelligence and Analytics.