New Delhi: According to a recent Jefferies study, India is developing as a strong steel growth market, the only major country to register substantial volume growth between 2019 and 2024.
While global steel production declined by 1% over this time, India's steel production increased by a remarkable 33%.
Jefferies says India is a bright spot in a global environment that lacks commodity volume growth. India was the only major steel market to experience considerable volume growth between 2019 and 2024.
According to the report, India is one of the few nations in the world with constant volume growth in key commodities such as carbon steel, stainless steel, coal, and aluminium.
Carbon and stainless steel use in the country has grown at a compound annual growth rate (CAGR) of 78% over the last 15 years, which is around 1. 1 to 1. 3 times greater than real GDP growth during the same period.
Looking ahead, Jefferies anticipates that India's steel firms will continue to perform well, forecasting an 8-10 percent volume CAGR from FY25 to FY27. Increased power demand in the nation is expected to boost coal volumes by 5% CAGR over the same period.
Furthermore, between 2017 and 2024, India's aluminum demand increased at a consistent rate of 7% CAGR, and similar commodity demand growth is projected to continue through fiscal year 25 to 27, with a range of 78% CAGR.
However, the domestic steel market experienced pricing pressure in the second half of 2024 as a result of lower Chinese steel prices and greater steel imports into India. This resulted in a 15% drop in domestic hot-rolled coil (HRC) steel pricing between June and December 2024.
In response, the Indian government implemented a 12% protective levy on flat steel imports in April 2025, valid for 200 days. A final evaluation by a government organization is anticipated between August and September of this year.
Following this decision, steel prices have recovered, climbing 14% year-to-date (CYTD) to Rs 53,500 per tonne. This price is now 5% more than the cost of imported steel.
Jefferies predicts that Indian steel prices would average between Rs 52,000 and Rs 53,000 in fiscal years 2026 and 2027, which is somewhat, around 13%, lower than the current spot price.
Overall, Indian steel firms' prospects remain bright as the country continues to fuel global demand in an otherwise sluggish commodities market.
