Steel demand is largely driven by economic growth due to its extensive applications across various industries. In FY2024, India became a net importer of steel for the first time since 2016, with a trade deficit of 1.1 million tons. This shift was driven by weak global markets and competitive pricing of Chinese steel, similar to the global steel glut in 2016.
In FY2024, steel consumption in India rose 13.6% to 136 million tons, supported by strong infrastructure growth and a 12.7% increase in finished steel production. Over the next 12-18 months, India's steel demand is expected to grow by 5-7%. Domestic demand growth is expected to be in line with capacity expansions by steel mills, with consumption forecast to grow by 8-10% y-o-y by FY2025.
India achieved a significant surplus in steel exports in FY2022, thanks to favorable conditions abroad. However, exports started to decline from FY2023 onwards as a result of an export duty on iron and steel products to increase domestic availability and stabilize prices. Despite this, processed steel exports reached around 7.5 million tons in FY2024, up 11.5% year-on-year from a lower base. The largest market for these exports was the European Union, mainly Italy and Belgium.
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