Everything that you need to know about the Indian steel industry

The Indian steel industry is one of the most promising industries in India and has carved a niche for itself. Investors are also looking forward to get all the details about the steel industry, its prospects, steel prices in India and other details to ensure that they stay updated with all the latest happenings in the steel industry.

When it comes to steel production and demand, India has an upper hand compared to other countries due to easy availability of raw materials and cheap labour. Furthermore, the steel demand is largely based on the growth of other related industries such as infrastructure, consumer durables and automobiles.

One of the core reasons why the Indian steel industry is growing superlatively is the availability of iron core in large quantities. It offers a tremendous cost advantage to the steel producers. Being a highly consolidated industry, it is the iron-based or the direct reduced iron route. Furthermore, most of the crude oil is with integrated steel producers. However, secondary steel producers with hot metal are ensuring that they don't leave behind. They are producing steel from scrap route.

Some quick facts about the steel industry

  • The finished steel consumption in India in the financial year of 2018 grew at a rate of 5.6% and reached 90.6 million tonnes.

  • Total crude steel and finished steel production improved to 102.3 million tonnes and 104.9 million tonnes in FY18 respectively.

  • In FY17, the total finished steel exports was 8.2 MT. In FY18, it increased to 9.6 MT at a rate of 17%.

  • India is the third largest crude steel producing nation in 2017. The main reason for this was the escalating global steel demand and increased steel production by the public and private steel producers.

  • In 2018, India’s finished steel imports grew to 7.4 MT compared to 7.2 MT in 2017.

  • India plans to increase its steel production capacity from 138 MT in 2018 to at least 300 MT in the next 10 years. The Indian government also is trying to make more industry-friendly policies to initiate production of special steel.

  • The global steel demand is growing at a steady rate.

India is still a major steel consuming country across the globe and it is the reason the demand for steel is growing at a steady rate. However, in recent years, countries such as China, Japan, South Korea and Russia were major players in steel imports and the result was drastic price cuts by the Indian steel industry. Domestic steel companies have suffered a bit due to a free trade agreement between India and other steel importing countries.

Steel rates in India are increasing at a steady rate due to global steel demand escalation. The raw material prices and global steel movements are largely dependent on the US dollar currency movement and other duties.

Indian Steel Industry Future Prospects

  • In the near future, India will be the world's 2nd largest steel producer by overtaking Japan. By 2030, the Indian government is planning to produce 300 MT of steel every year.

  • Due to thriving possibilities in the areas of railways, automobiles and infrastructure sectors, the per capita steel consumption is expected to grow to a substantial level.

  • Mostly all the major steel producers in India are improving their steel production capacities to meet the global steel demand.

  • Currently, the infrastructure sector contributes to 95 of steel consumption and will reach 11% by 2025-26.

  • Furthermore, steel production in the airport building is estimated to grow 20% or more over the next few years.

What is there for commodity investors?

If you are investing in steel and iron metals, you need to stay updated about the daily steel rates in India. In the upcoming years, you can expect great movements when it comes to steel rates & prices in India. Invest wisely and earn huge profits. The most important thing is to stay updated about steel rates and make decisions accordingly.