Amid a subdued global environment, growth in Indian steel demand is expected to continue at a CAGR of around 8% over the next two-three years, primarily driven by sustained momentum in end-user sectors such as infrastructure and construction.
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India’s direct steel exports to the U.S. are relatively low, constituting around 4% of its total exports in CY24. As a result, the direct impact on the steel sector’s sales volume due to the imposition of tariffs by the US is not expected to be significant.
However, there is likely to be an indirect effect on realisations if major steel exporters to the US divert some of their supplies to India.
Global steel consumption is expected to decline for the second consecutive year in CY24, mainly due to a decline in consumption from major developed countries, including the USA, Japan and the European region.
China, which accounts for nearly half of global steel production and demand, also experienced a continued decline in domestic consumption. However, the capacity utilisation rate of the Chinese steel industry remains above 80-85%. This, combined with declining domestic demand, has led to significant surplus production being exported, estimated at around 90-95 million tonnes during CY24, an increase from approximately 65 mnmt previously CY22.
India continues to witness good demand for steel, growing at around 10-13% during the last three fiscal years (FY22 to FY24).
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