The steel industry is set to witness robust capacity in the coming years as around 27.5 million tonne per annum (mtpa) is expected to come onstream between the financial year 2025 and 2027. According to a report by Icra, the Industry is likely to report an all-time high capacity addition of 15.6 mtpa in the current financial year. The steel consumption growth has remained strong in the recently concluded quarter.
Icra has reported that even though the industry will see record levels of capacity additions, these will be counterbalanced by incremental demand. This is expected to take the utilisation level of the Industry to a decadal high of over 88 per cent in FY24-FY25E.
The steel consumption reported a 15 per cent year-on-year (YoY) growth in Q1FY25. As there is a possibility of a slowdown during the current quarter due to seasonality, the rating agency has projected the consumption growth on the full-year scale to remain healthy at 9 to 10 per cent.
As far as the imports are concerned, the country remained a net importer of finished steel in Q1FY25 as steel imports grew at 35.4 per cent YoY in the quarter. The imports have led to a price correction of 6 per cent till the first week of August as compared to the prices seen in the first week of May. On the other hand, the exports of finished steel are likely to witness a modest increase of 7 to 8 per cent in FY25. Notwithstanding the dip in prices of steel, the steel spreads are likely to be supported by softer raw material prices in the near term, Icra noted.
The National Mineral Development Corporation (NMDC), the country’s leading merchant iron ore producer slashed the prices of iron ore by around 18 per cent in the first week of the current month as compared to the peak levels observed in the last week of May month.
