- Steel production, consumption jump 9-10% y-o-y
- Steel exports slide 24%, imports drop 14% y-o-y
- BigMint’s India Steel Index drops 6%, stands at 4-year lows
Morning Brief: India’s iron and steel industry showed steady growth in H1CY’25, though exports emerged as a concern.
Leading the growth were crude steel production, which climbed up by 9% y-o-y, and steel consumption, which jumped by 10%. Conversely, changes in iron ore and coal production were minimal, though domestic scrap generation shot up by 18% y-o-y.
Exports remained poor, for both iron ore and steel, with volumes plunging due to lacklustre global demand. Imports showed mixed trends — steel and thermal coal imports fell, while metallurgical coal imports edged up and iron ore and scrap surged.
Crude steel production grows at brisk pace
Crude steel production recorded a healthy uptick of 9% y-o-y to 80.6 million tonnes (mnt) on steady capacity expansion and higher consumption. Parallelly, finished steel production also increased 9% to 77.8 mnt.
In comparison, output in CY’24 had increased at 6% y-o-y to 148 mnt, indicating the first half of this year witnessed an acceleration in production momentum.
Among the steel majors, JSW Steel significantly boosted its crude steel production in H1CY’25. JSW Steel’s Indian operations witnessed production growth of 12% in Q1CY’25 and 15% in Q2CY’25. SAIL and Tata Steel’s volumes were more or less stable y-o-y.
Consumption jumps, though key sectors show mixed trends
India’s steel consumption increased at 10% y-o-y to 78.8 mnt, higher than the 9% growth recorded in CY’24.
Infrastructure expansion, through schemes such as PM Gati Shakti and the PM Awas Yojana, continued to steer consumption growth. However, infrastructure output seems to have slowed in recent months, growing by 0.5-1.7% y-o-y in Q2CY’25, as per government data.
The real estate sector also provided support, though there was a slight dip y-o-y. CREDAI-CRE Matrix data shows that housing sales across India’s tier 1 cities dropped 4% in terms of the units sold — to 2.54 lakh from 2.7 lakh.
Meanwhile, automobile production grew modestly, by 4% y-o-y to around 14.6 million units, contributing to higher steel consumption.
India remains net steel importer
India was a net steel importer in H1CY’25, in the wake of a steeper drop in outgoing shipments than in incoming ones. The steel trade deficit stood at 0.7 mnt, expanding from 0.3 mnt in H1CY’24.
India’s steel exports (including stainless steel) plunged by 24% in H1CY’25 to 3.7 mnt amid a subdued global market.
A persistent supply surplus, higher exports by China at overly low prices, and tariff-related trade uncertainty impacted Indian mills’ performance in the seaborne landscape. Shipments to the EU, Saudi Arabia, and Vietnam experienced sharp drops.
Concurrently, imports fell 14% y-o-y to 4.4 mnt, with the provisional 12% safeguard duty succeeding in halting arrivals of low-priced flats. Imports from China and Japan shrank by 46% and 41% y-o-y to 0.83 mnt and 0.56 mnt, respectively.
India Steel Composite Index plunges 6% y-o-y, at 4-year lows
A barometer of domestic steel prices, BigMint’s India Steel Composite Index fell 6% y-o-y to 133 points. A weak global pricing environment and buyers’ dogged push for lower tags pressured Indian steel prices.
The year opened with the index moving in a narrow range, at around four-year lows. However, it started surging from March, around the time the safeguard duty was announced and reports of a supply shortage emerged, due to some mills taking maintenance shutdowns or production cuts.
However, the index began to soften from April, setting off a 12-week downtrend, as buying interest faded and price resistance emerged. Inventories also swelled, which prompted manufacturers to shave off their offers.
The early onset of the monsoon also dampened construction activity, leading to a steady decline in steel prices and, by extension, the index in May-June. The index again retreated to around four-year lows by the end of H1CY’25.
Raw materials landscape
Iron ore
Production: Despite increased steel output, iron ore production dipped by 1% y-o-y to 154.1 mnt.
Among key miners, OMC recorded a 15% decline, while NMDC lifted its output by 6%, as per provisional data compiled by BigMint. The drop in OMC’s volumes could be attributed to elevated inventories at the beginning of Q2, which is likely to have prompted slower mining activity.
Meanwhile, NMDC’s growth is in line with its efforts to meet its FY’26 production guidance of 55.4 mnt, which is significantly higher than the 44 mnt it mined in FY’25.
Exports: Amid muted demand from China, India’s iron ore and pellet exports plummeted by 45% y-o-y in H1CY’25 to 14.3 mnt. Competitive prices of mainstream iron ore fines and domestic steel consumption woes triggered a pushback from Chinese importers. Additionally, Indian exporters were disinclined to close deals amid unviable prices and poor margins.
Imports: Iron ore and pellet imports more than doubled to 4.8 mnt in H1CY’25 from 2 mnt in H1CY’24. The steep spike was triggered by supply shortages in the domestic market and favourable global pricing, which led to Indian buyers receiving competitive offers for import cargoes.
Notably, pellet imports resumed in December 2024 following a four-year hiatus, with the H1CY’25 total standing at around 1 mnt compared to nil last year.
Coal
Production: Coal production edged up by 2% to 569 mnt in H1CY’25. Further growth could have been capped by a persistent domestic supply glut, which has weakened prices and softened trade momentum.
To illustrate, CIL’s output edged down by 2% y-o-y to 421 mnt during this period. Meanwhile, the company’s inventory averaged 99.7 mnt in January-May 2025 against 77.8 mnt in January-May 2024.
Metallurgical coal imports: Amid accelerating crude steel production, metallurgical coal imports also inched up 3% y-o-y to 40.9 mnt. India witnessed significant import diversification in this half-year as mills prioritised cost efficiency through blending grades and sourcing from alternative regions.
For example, India reduced its imports from Australia, the US, and Canada in favour of buying higher volumes from Russia and Mozambique.
Non-coking coal imports: Elevated non-coking coal inventory at ports and ample stocks at power plants resulted in a 5% drop in India’s import volumes to 88.6 mnt. The early onset of the monsoon, growth in renewable energy sources, and the domestic supply surplus also limited consumption.
Scrap
Generation: India’s scrap generation increased by 18% y-o-y to 15.6 mnt, buoyed by targeted policies such as the end-of-life (EoL) vehicle scheme and the establishment of new vehicle scrappage centres.
Imports: However, even then, the availability of scrap was too limited to fulfil domestic needs. As such, scrap imports increased by an equal 18% y-o-y to 4.6 mnt in H1CY’25, bolstered additionally by low offers from suppliers.
Outlook
Earlier projections suggest that India’s steel consumption is set to grow by 8.5% y-o-y, and going by the current scenario, the country is expected to keep up with or may even exceed this target.
Factors that are expected to provide support include the RBI’s liquidity boosts, a rising rural economy, and supportive urban demand. Higher government capex on infrastructure and continued expansion in manufacturing activity will also spur steel consumption, incentivising production of iron ore and coal, too.
Moreover, a decline in Chinese steel production and exports could also revive India’s momentum in the seaborne market. Steel prices may also pick up, supporting Indian tags.
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