India’s steel sector has marked a massive improvement in October, with steel recording double-digit growth and imports decreasing due to government measures aimed at quality control.
Double-digit growth in steel exports
India’s steel exports sets a positive outlook in its sector by comparing to the previous month it rose by 11% in October 2024. According to data released by the Ministry of Steel, exports increased from 4 lakh tonnes in September to 4.4 lakh tonnes in October. This growth marks a significant boost for the sector, reflecting growing demand in international markets.
The increase in exports is likely to provide Indian steel producers with better pricing power in the third quarter, a senior official noted.Higher demand overseas combined with pleasing conditions in the domestic market is expected to strengthen the steel sector’s profitability in the coming months.
Decline in steel imports benefits domestic producers
While exports grew, steel imports fell for the first time this financial year, dropping by 4% to 9.8 lakh tonnes in October from the peak of 11 lakh tonnes in September. The decrease in imports was primarily driven by government-imposed restrictions on lower-quality steel imports, particularly from countries like Vietnam. This policy move is designed to protect domestic producers and enhance product standards in the industry.
The decline in imports, combined with rising exports, provides an advantageous scenario for domestic steel companies, who may benefit from an improved price environment in the local market.
Domestic prices show upward trend
The dip in imports has influenced domestic steel prices as well, with prices for long steel products witnessing a 2% increase, reaching INR 53,000 per tonne in October, according to senior officials from the Steel Authority of India Limited (SAIL). JSW Steel CEO Jayant Acharya also indicated a positive trend in an investor call, noting that prices are beginning to rebound following a sharp decline in September, which had coincided with a surge in imports.
India’s steel production targets driven by infrastructure boom
India’s steel production is expected to reach 152 million tonnes in the fiscal year 2024-25, representing an annual growth rate of 8%. This growth is largely charged by substantial government investment in infrastructure projects, including highways, ports, and railways. Increasing urbanization and the subsequent rise in construction activities are further driving demand for steel products, positioning the industry for continued growth.
