Domestic steel consumption to see 9-10% growth in FY25: ICRA

Domestic steel consumption in India is expected to grow by 9-10% this financial year, according to a report by rating agency ICRA. The first quarter saw robust demand, with consumption increasing by 15% YoY, driven by competitively priced imports. Despite a projected sequential slowdown due to seasonal factors related to the monsoon, demand is anticipated to recover towards the end of the year with increased government capital expenditure. ICRA also forecasts that capacity utilization will reach a decadal high of 88% in FY25 despite an unprecedented capacity addition of 15.6 million tonnes per annum (MTPA) and a surge in imports.

The steel sector has been experiencing rapid growth, the fastest since the global financial crisis, with a 13.6% consumption increase in FY24, just shy of the 13.9% peak in FY06. The global steel market significantly impacts the domestic industry. With sub-par economic growth in China and other major steel-producing regions, trade flows have been redirected to high-growth markets like India. Consequently, domestic finished steel imports have been steadily rising since FY23.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.