HOLDING STRONG

Strong Consumption Sustains India's Steel Success; Maintaining The Barricades Against Imports Remains Key

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India has emerged as one of the few bright spots in an otherwise subdued global steel landscape.

While major steel-producing regions grapple with weak demand, excess capacity, and declining prices, India's domestic market continues to demonstrate exceptional resilience.

Demand across major economies remains tepid, while elevated Chinese exports have contributed to a supply glut that has pushed steel prices to multiyear lows. These conditions have eroded realizations for steelmakers worldwide, leaving many producers struggling to maintain margins.

China, which accounts for more than half of global steel output, is expected to produce around 950 million tonnes of steel this year - marginally lower than previous years. However, its domestic steel consumption is set to decline. As a result, China, alongside other Asian producers, has diverted surplus steel to international markets, including India. This has intensified competitive pressures and contributed to global price weakness.

Ironically, even as China's production moderates, the country has been importing large quantities of iron ore. This behaviour suggests not only destocking across global supply chains but the possibility of eventual production ramp-ups, which could further weigh on global steel prices.

Strong internal consumption has helped India shield its steel industry from the full impact of international price volatility. Nonetheless, sustaining this momentum will require continued policy support, particularly to counter the influx of cheap imports.

GOVERNMENT PROTECTION

A pressing concern for the Indian steel industry is the increasing influx of low-priced steel imports, particularly from China and certain ASEAN countries. Recognizing the risk posed to domestic producers, the government introduced several trade-remedy measures in 2025.