Key Points

While global steel production fell one per cent during this period, India's steel output grew by a robust 33 per cent.

Jefferies says "India offers a bright spot in the world largely devoid of volume growth in commodities. India was the only large steel market to see meaningful volume growth over 2019-24".

The report highlighted that India is currently one of the few countries in the world showing consistent volume growth across major commodities, including carbon steel, stainless steel, coal, and aluminium.

Over the past 15 years, carbon and stainless steel consumption in the country has increased at a compound annual growth rate (CAGR) of 7-8 per cent, which is about 1.1 to 1.3 times higher than the real GDP growth during the same period.

Looking ahead, Jefferies expects India's steel companies to maintain strong performance, projecting an 8-10 per cent volume CAGR over FY25 to FY27. Rising power demand in the country is also likely to support a 5 per cent CAGR in coal volumes during the same time.

In addition, India's aluminium demand has shown a steady 7 per cent CAGR between 2017 and 2024, and similar demand growth is expected to continue across commodities through FY25 to FY27, in the range of 7-8 per cent CAGR.

However, the domestic steel market faced pricing pressure in the second half of 2024 due to a drop in Chinese steel prices and increased steel imports into India. This led to a 15 per cent decline in domestic hot-rolled coil (HRC) steel prices between June and December 2024.

In response, the Indian government imposed a 12 per cent safeguard duty on flat steel imports in April 2025, valid for 200 days. A final review by a government agency is expected between August and September this year.

Following this move, steel prices have rebounded, rising 14 per cent in calendar year-to-date (CYTD) to reach Rs 53,500 per tonne. This price is now 5 per cent higher than the cost of imported steel.

Jefferies forecasts that Indian steel prices will average between Rs 52,000 and Rs 53,000 in FY26 and FY27, which would be slightly, about 1-3 per cent, below the current spot price.

Overall, the outlook for Indian steel companies remains positive as the country continues to drive global demand in an otherwise slow-moving commodities market.

- ANI