Boom in Indian steel demand to last through FY24: Crisil

Kolkata According to global analytics firm Crisil, the Indian steel industry has experienced a multi-year demand surge that will continue in FY'24 but is predicted to moderate in FY'25. In three years, the industry has seen double-digit demand growth rates of 11 to 13 percent, and in FY'25, it is expected to slow to 3 to 5 percent, according to Miren Lodha, Director of Research at Crisil Market Intelligence and Analytics, who made this announcement on Friday.

"It is evident that we are experiencing a supercycle in demand," Lodha stated to PTI.

Before the general election, in FY'25, there will probably be some moderation in the long steel segment.

According to him, there has only been one other similar demand spike in the previous 20 years, and that was from 2006 to 2008.

According to Lodha, the infrastructure industry, which is a major factor in the demand for steel, is anticipated to keep growing thanks to ongoing government initiatives.

The steel demand has been increasing significantly due to the infrastructure sector, and this trend is anticipated to continue in the upcoming years. But as government programmes like the Pradhan Mantri Awas Yojana draw to an end, he said, the demand momentum in the steel industry may slow down.

According to Lodha, domestic manufacturers are becoming concerned about the recent spike in steel imports, which is being driven by lower Chinese prices and strong Indian demand.

"The disparity between import and domestic prices has triggered significant imports," he continued. Over time, however, it will self-correct due to the continuous capacity addition.

"New steelmaking capacity of 12-13 million tonnes is expected to come online in the second half of fiscal 25, aligning production with demand and reducing import dependence," said Lodha.

Chinese exports to India may also be further restricted by anticipated production cuts and possible demand recovery in China following the Lunar New Year.

The future of the Indian steel industry is bright overall, even though demand is expected to decline in 2019. According to him, the industry's main priorities will be to increase home production and address import issues in order to sustain strong long-term growth.