India’s Steel Demand to Outpace Global Growth with 8-9% Rise in 2025
India’s steel demand is projected to outpace that of other major steel-consuming economies in 2025, with an anticipated growth rate of 8-9 percent, according to a report by CRISIL. The growth will be primarily driven by an increase in steel-intensive construction within the housing and infrastructure sectors, along with stronger demand from engineering, packaging, and other industries.
In contrast, global steel demand is expected to increase modestly by 0.5-1.5 percent in 2025, following a decline of around 1 percent in 2024. Notably, steel demand in China, the largest producer and consumer, fell by 3.5 percent in 2024, largely due to weaker demand from the real estate sector despite supportive policy measures. Other regions, including Europe, Japan, and the US, also faced declines in steel demand by 2-3 percent. However, India stood out as one of the bright spots in the global steel market with an 11 percent increase in demand in 2024. As the global steel market stabilizes in 2025, developing economies like India are expected to lead the demand recovery. India’s growth will continue to be robust, supported by a strong focus on infrastructure and construction projects, key drivers for steel consumption.
However, the supply side of India’s steel market remains a concern, with growth in production from domestic mills being sluggish. CRISIL noted that in 2024, the supply growth from India’s major mills was a modest 5.2 percent, largely due to extended maintenance shutdowns. While the top steel producers saw limited growth, small and medium players showed more substantial increases in production. One challenge in the domestic market is the rise in competitive imports. Finished steel imports have surged in recent years, particularly from countries like China, Japan, and Vietnam. These imports have put pressure on domestic steel prices, especially as Chinese imports of hot-rolled coils (HRC) surged 28-fold between 2022 and 2024. Such imports are often priced at a discount compared to domestic prices, creating additional challenges for Indian steel manufacturers.
Despite these pressures, the steel industry remains optimistic about the outlook for 2025, particularly due to the potential implementation of a safeguard duty on steel imports. The safeguard duty, which could be enacted by the end of February 2025, is expected to support domestic steel prices by curbing excessive imports. This move is projected to increase steel prices in the first half of 2025, with an estimated 4-6 percent upside potential. Vishal Singh, Director of CRISIL Market Intelligence and Analytics, emphasized that while steel prices may rise in 2025, competition among mills to capture market share could limit the extent of price increases. Additionally, as mills ramp up production from newly commissioned capacities, the increased supply of steel may help stabilize prices in the latter half of the year. The domestic steel market will continue to face challenges in balancing imports, production, and pricing, but with strong demand growth anticipated, India is well-positioned to lead the global steel market in 2025.
