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Indian Steel Exports Face Headwinds: Why Global Orders Are Drying Up

Indian steel exports are expected to slow down after a recent spike. The earlier surge was largely because European buyers stocked up ahead of a new carbon tax, but those orders have now dried up. Meanwhile, steel companies at home are caught between falling domestic prices and rising raw material costs, which will hurt their profits. The global market isn't helping either, with overall production down and China poised to implement new export rules.

Key Points: Indian Steel Export Growth to Moderate as Global Orders Fall

  • October exports surged 83% due to European pre-carbon tax stockpiling, but new orders have now stalled
  • Domestic steel prices are falling despite a 6% rise in production, squeezing producer margins
  • Rising Australian coking coal costs and falling selling prices are set to shrink Q3 profits for steelmakers
  • Global steel production fell 6% in October, with China's output down 12% but its exports rising again
3 min read

Indian steel exports expected to moderate as global orders dry up: Elara Capital

Elara Capital report predicts slowing steel exports amid falling global demand and rising costs, pressuring domestic producers' profits.

"China is expected to implement a steel export licensing mechanism from 1 January 2026, requiring exporters to obtain approvals for shipping a wide range of steel products - Elara Capital Report"

New Delhi, December 17

Indian steel exports are expected to see less growth in the coming months as overseas orders start to dry up. According to an Elara Capital report, exports jumped by 83 per cent in October to 0.73 million tonnes. This fast pace is unlikely to continue as the surge happened because buyers in Europe bought more steel to stock up before a new carbon tax starts there.

However, the report said that new orders have stopped for December, except for small amounts of coated steel products.

The steel industry in India is facing several challenges at once. Steel production in the country grew by 6 per cent in October to about 13.6 million tonnes. Early data for November shows that production is still going up, but the prices of steel in India are falling. The price of a common type of steel called hot-rolled coil (HRC) dropped to about Rs 46,750 per tonne in November.

Raw material costs are also making things difficult for steel companies. While steel prices are going down, the cost of coking coal from Australia went up by 7 per cent.

Elara Capital expects that these companies will see their profits shrink in the third quarter because of these high costs and low selling prices. The report mentions that the market can only handle small price increases of about Rs 500 to Rs 1,000. Because of this, the report suggests that companies making aluminium might be in a better position than steel companies right now.

Global trends are adding to the pressure on the Indian market. Around the world, steel production fell by 6 per cent in October. China saw a big drop in its production by 12 per cent, yet its exports to other countries started to rise again. "China is expected to implement a steel export licensing mechanism from 1 January 2026, requiring exporters to obtain approvals for shipping a wide range of steel products, including billets, hot-rolled coils and stainless steel," the report said.

India has tried to protect its own industry by making imports more difficult. Steel imports fell by 52 per cent in October because people expected the government to bring back special taxes.

New duties on steel from Vietnam and China also made importers more careful about buying from abroad. Even with these steps, the combination of slow demand at home and fewer orders from Europe is expected to keep the pressure on Indian steel makers in the near future.

- ANI

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Reader Comments

P
Priyanka N
The government's steps to curb imports are good, but they're not enough. With domestic prices falling and input costs rising, our steel mills are caught in a squeeze. Need policies that boost infrastructure spending to create local demand. 🇮🇳
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Rahul R
China reducing production but increasing exports is a huge red flag. They'll flood the global market just as our orders from Europe dry up. The 2026 licensing mechanism is too far away. We need to be prepared for more Chinese steel coming to Asia.
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Sarah B
Working in manufacturing, we've seen steel prices become very volatile. This uncertainty makes planning difficult. Hope the industry and government can work on more stable pricing mechanisms, even if it means slightly higher but predictable costs for us buyers.
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Aman W
The shift towards aluminium is interesting. Maybe it's time for diversification. But let's not forget the lakhs of jobs in steel. The focus should be on modernizing plants for greener steel to meet future global standards, not just chasing quarterly profits.
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Kriti O
Respectfully, I think the report highlights a reactive industry. We celebrated the 83% jump, but it was built on shaky ground. We need better market intelligence and stronger trade agreements beyond Europe. The 'Make in India' demand has to materialize now.
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Nikhil C

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