India’s Steel Demand Set to Rise 8-9% in 2025

With a demand rise of 8–9% in 2025, India will continue to surpass other significant steel-consuming economies, according to CRISIL’s Market Intelligence & Analytics research. The survey also stated that increased demand from engineering, packaging, and other industries will fuel this need, as well as a move toward steel-intensive development in the housing and infrastructure sectors.

Domestic Supply still muted
However, the report notes that domestic supply will continue to be a “point of concern,” noting that demand in India is thought to have climbed by 11%. Weaker output growth in 2024 was also caused by competitive imports and a drop in exports. To put it in figures, 3.2 million tonnes of finished steel were made available outside of domestic production as a result of a 6.4% decrease in exports and a 24.5% increase in finished steel imports. Furthermore, this additional material availability satisfied 2% of the total demand for finished steel.

According to the research, India has seen a sharp rise in the import of finished steel in recent years from all major exporters. For instance, there is little to no amount of hot-rolled coils and strips (HRC) as well as cold-rolled coils and strips (CRC) supplied by China which has been a long-time supplier of alloy, stainless, and galvanized and coated steel. However, imports of HRC surged 28 times between 2022 and 2024, while imports of finished steel from China increased 2.4 times.

Notably, HRC is used as a raw material to make a variety of downstream goods with added value. Since these imports are frequently less expensive than domestic HRC, domestic steel prices are under pressure.

In a similar vein, HRC imports rose 16.6 times in 2024 compared to 2022, while total finished steel imports from Japan increased 2.8 times. At the same time, when HRC imports sored 27-fold, Vietnam’s finished steel imports increased 8-fold. South Korea’s proportion in India’s completed steel import basket decreased due to its very moderate import growth.

Domestic Steel prices fall
In contrast, domestic steel prices fell in 2024 as a result of increased material supply brought on by a rise in net imports. The topline growth of domestic mills was slowed by a 9% decrease in HRC pricing and a 7% reduction in CRC prices. Nonetheless, the study indicates that low volatility and declining coking coal prices have lessened margin pressure to some extent.

In 2024, the spot price of coking coal for the Premium Low Volatility grade, which is of Australian origin, dropped by 12%, although iron ore prices are expected to have increased by 9% to 10% over that time. Interestingly, the cost of Chinese HRC exports decreased by 12% in 2024 and remains cheaper than that of local mills.

Steel Prices in 2025
According to the analysis, if the industry’s suggested safeguard charge is imposed, steel prices in 2025 would be significantly higher than in 2024, with the impact being more noticeable in the first half of the year.

HD Kumaraswamy, the Union Steel Minister, recently told a news agency that the government was thinking of putting a 25% ‘safeguard duty’ on steel imports. It follows concerns expressed by a number of industry participants regarding low-cost steel imports from China and other nations.

Vishal Singh from CRISIL stated regarding the steel prices saying that steel prices are set to remain soft in 2025 amid global steel prices going on a downtrend. Prices could increase by 4-6% if the safeguard duty is implemented. Additionally, flat steel costs will drop as mills boost production volume from recently commissioned capabilities, but they will still be higher than the average price for 2024.

Global Steel Demand
In 2024, the demand for steel globally saw a slight decline of 1% as per the report published by CRISIL. Despite favorable regulatory changes and the delivery of assistance packages, demand in China, the world’s largest producer and consumer of steel, fell 3.5%, driven mostly by a fall in steel demand from the real estate sector.

The demand for steel from the US, Japan, and Europe also saw an estimated 2-3% decline in demand. Demand growth in emerging nations like Brazil and India, however, prevented a sharp drop in worldwide demand. According to estimates, demand has grown by 2.7% in other steel-consuming economies, 5.6% in Brazil, and 11% in India.

Due to improved financing circumstances and pent-up demand from several important steel-consuming economies, which would boost manufacturing operations, the world’s steel demand is predicted to increase by 0.5% to 1.5% in 2025.

Growth will also be supported by the expected recovery in residential construction in economies including the US, EU, and Korea, which coincides with the loosening of financing requirements. According to the research, India would remain at the top of the demand rankings.

The image added is for representation purposes only