Production Dynamics
India’s crude steel output is projected to have risen by 6% year-on-year, reaching 152 million tonnes (mnt) in FY’25, a deceleration compared to the over 14% growth observed in the previous fiscal year. Notably, the Basic Oxygen Furnace (BFBOF) route’s contribution declined, with its share dropping from 43% in FY’24 to 41% in FY’25. Conversely, the induction furnace segment experienced growth, increasing its share from 32% to 38% over the same period.

Consumption Patterns
Domestic steel demand is estimated to have reached 149 mnt, marking a 9% increase from 136 mnt in FY’24. This growth, though positive, reflects a slowdown from the 13% surge seen in the prior year, largely attributed to pre-election infrastructure spending. The infrastructure and construction sectors continued
to dominate consumption, accounting for approximately 63- 65% of total demand.

Market Pressures and Pricing
The influx of imports exerted downward pressure on domestic prices, leading to a 7% year-on-year decline in BigMint’s India Steel Composite Index. The flat steel segment bore the brunt, with imports capturing over 90% of this market. In response, the government proposed a 12% provisional safeguard duty on flat steel imports, aiming to stabilize prices and support local producers.

Trade Dynamics
Steel imports increased by 8% to 9.8 mnt, representing about 6.5% of domestic consumption. This uptick, particularly in specific flat steel products, posed challenges for primary producers. On the export front, volumes declined by nearly 30% to 6.7 mnt, influenced by heightened competition from Chinese suppliers in key markets and subdued global demand.

Raw Material Insights
Iron ore production grew by 6% to 295 mnt, aligning with increased demand from the steel sector. However, exports of iron ore fines and pellets experienced a significant drop of 36%, primarily due to reduced demand from China and lower global prices. Coal production surpassed the 1 billion tonne mark, leading to a 9% decrease in non-coking coal imports. In contrast, metallurgical coal imports saw a modest rise of 4%, reflecting the production trends in the BF-BOF segment.

Looking Ahead
The late introduction of safeguard duties provided some relief to domestic prices, with expectations of continued price adjustments in the early quarters of FY’26. Additionally, exemptions from the European Union’s anti-dumping measures and potential production cuts in China may enhance India’s export prospects, though a swift recovery remains uncertain.

In summary, FY’25 was a year of measured growth and strategic recalibrations for India’s iron and steel industry. Balancing domestic production with external market forces and policy interventions will be crucial as the sector navigates the evolving global landscape.