India’s Steel Makers Optimistic Despite Export Slowdown and Chinese Competition

Despite a slowdown in steel exports and increased competition from China, Indian steel makers remain optimistic due to strong domestic demand. In May 2024, India’s steel exports dropped to 0.5 million tonnes, the lowest in six months. However, domestic steel consumption rose by 10.5% to 23 million tonnes in April-May 2024.

Industry leaders attribute this to higher infrastructure spending and economic growth. Anil Kumar Chaudhary, Chair of the Minerals and Metals Committee at the PHD Chamber of Commerce and Industry, stated, “Higher infrastructure spending and accelerated economic growth have made India a very lucrative market for domestic and global steel makers.”

According to research firm SteelMint, domestic finished steel consumption grew by 13% to 136 million tonnes during 2023-24, driven by the automotive and infrastructure sectors. The government is also optimistic about the growing steel demand in the country. Steel Secretary Nagendra Nath Sinha predicted a 10% growth in demand.

Sanjay Gupta, Chairman and Managing Director of APL Apollo Tubes Limited, highlighted the significant and growing domestic demand for steel, driven by robust construction, infrastructure projects, and the automotive sector. He emphasized the potential for increased domestic steel consumption due to the Indian government’s focus on infrastructure development and the ‘Make in India’ initiative.

Despite the pressure on steel prices due to a global demand slowdown, some companies have maintained satisfactory margins through cost-cutting measures and efficiency improvements. According to a CRISIL report, India became a net importer of steel in fiscal 2024, with an overall steel trade deficit of 1.1 million tonnes. The government’s focus on infrastructure expansion and schemes like PM Gati Shakti and Make in India have contributed to increased steel demand.