India’s steel industry has emerged as the brightest spot in the global commodities landscape, defying broader stagnation trends across the world. In a comprehensive report published by Jefferies on June 2, 2025, India is recognized as the only major country to record significant volume growth in steel production between 2019 and 2024. While global steel output declined by 1% during this five-year period, India’s steel production soared by 33%, underscoring its resilience and upward growth trajectory.

Jefferies emphasizes that India is not only excelling in steel but also in other key commodities including coal, aluminium, and stainless steel, all of which are critical inputs for infrastructure and industrial development. This puts India in a unique position as a multi-commodity growth engine in an otherwise subdued global market.

India Defies Global Trends in Steel Output

According to the Jefferies report, while major economies grappled with supply constraints, falling demand, and policy uncertainty, India has managed to:

• Maintain a consistent growth trajectory in steel volumes

• Support output through strong domestic demand and infrastructure focus

• Expand downstream capabilities in stainless and carbon steel segments

From 2019 to 2024, India's performance in steel output reflects a strategic alignment between policy, demand-side strength, and domestic capacity enhancement. This performance is even more significant when compared to the flat or negative output trends seen in large producers like China, Europe, and the United States during the same period.

CAGR of 7-8% in Steel Consumption Surpasses GDP Growth

Another noteworthy insight from Jefferies is the long-term growth trajectory of steel consumption in India. Over the last 15 years, both carbon steel and stainless steel usage in the country has grown at a compound annual growth rate (CAGR) of 7-8%, outpacing India’s real GDP growth. This divergence indicates a structural increase in steel intensity per unit of economic output, likely driven by:

• Rapid urbanization

• Expansion of transportation networks

• Affordable housing schemes

• Rising manufacturing output

This has made steel not just a support commodity, but a cornerstone of India’s long-term economic expansion.

Outlook for FY25–FY27: 8–10% Volume CAGR Forecast

Looking ahead, Jefferies anticipates that Indian steel companies will continue to grow at a healthy volume CAGR of 8-10% between FY25 and FY27. Several factors are expected to fuel this growth:

• Rising power demand, driving higher coal consumption, which is linked to metallurgical coal used in steelmaking

• Continued expansion in construction and infrastructure projects under programs like PM Gati Shakti, National Infrastructure Pipeline, and Make in India

• Sustained growth in aluminium demand, which correlates with steel usage in sectors like transportation and electrical infrastructure

This projection reflects a robust demand-side story, complemented by ongoing capacity expansion and modernization efforts within the Indian steel ecosystem.

H2 2024: Temporary Pressure from Chinese Prices and Imports

Despite its strong fundamentals, the Indian steel market faced temporary headwinds in H2 2024, primarily due to:

• A decline in global steel prices, led by surplus Chinese production

• Increased steel imports, particularly of flat steel, impacting domestic producers

• A 15% drop in domestic hot-rolled coil (HRC) steel prices, straining margins and causing concern among local players

These factors triggered short-term volatility, prompting the government to act swiftly to restore equilibrium.

Government Intervention: 12% Safeguard Duty on Imports

In response to the rising imports and plummeting prices, the Government of India imposed a 12% safeguard duty on flat steel imports in April 2025, valid for 200 days. This policy move had several immediate effects:

• Reduced import volumes, especially from China and Southeast Asia

• Restored competitiveness for Indian producers

• Led to a 14% rebound in steel prices year-to-date

As of June 2025, domestic steel prices have stabilized at ₹53,500 (US$ 625.20) per tonne, which is about 5% above import parity—ensuring profitability for domestic producers while deterring excess imports.

FY26 and FY27 Steel Price Outlook

Despite the recent rebound, Jefferies expects steel prices to moderate slightly in the medium term, forecasting an average of:

• ₹52,000 (US$ 613.52) to

• ₹53,000 (US$ 619.36) per tonne in FY26 and FY27

These levels are still supportive of healthy margins, especially for integrated steel players with low-cost operations and strong balance sheets.

Broader Commodities Growth: India Leads the Pack

India's impressive performance in steel is mirrored in its growth across other commodities, further strengthening its position in the global supply chain. Jefferies notes consistent volume growth in:

• Coal, driven by higher energy consumption and industrial activity

• Aluminium, supported by increased usage in transportation, power, and packaging sectors

• Stainless steel, where India is becoming a hub for both domestic use and exports

This multi-commodity growth narrative underscores India’s strategic importance in global manufacturing, construction, and infrastructure sectors.

Policy Support and Investment Climate

The Indian government has taken a proactive stance in supporting the steel industry through:

• Production Linked Incentive (PLI) schemes for specialty steel

• Lowering import dependency via local capacity creation

• Easing regulatory frameworks for setting up steel plants

• Faster environmental clearances and raw material linkages

Additionally, domestic steelmakers are investing heavily in:

• Green steel technologies

• Renewable energy integration

• Digital transformation in manufacturing

• Backward integration for raw material security

These moves are not only improving competitiveness but also making Indian steel companies more resilient to global shocks.

Conclusion: India—A Beacon in Global Steel

The Jefferies report cements India’s position as the undisputed growth engine of the global steel industry. With a 33% rise in production from 2019 to 2024, sustained 7-8% historical CAGR in steel consumption, and a projected 8–10% CAGR through FY27, India has become a structural leader in steel demand and supply.

Even in the face of temporary pricing pressures and global oversupply concerns, India’s policy agility, strong domestic demand, and multi-sectoral industrial growth have ensured that the steel industry remains buoyant. The 12% safeguard duty has proven timely, allowing domestic prices to recover and ensuring fair competition.

India is now at the forefront of a steel-led industrial transformation, with its producers, policymakers, and investors working in tandem to build a sustainable, globally competitive sector. As the rest of the world looks for growth drivers in a slowing commodities market, India stands tall as a beacon of momentum and opportunity in steel.

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