Steel prices in India have hit a five-year low, causing alarm among the country’s steel-producers, especially the smaller players.
While the government is aiming to increase the steel industry’s capacity in the next five to seven years, almost 150 small steel producers were forced to stop production on account of very low prices, said veteran IAS officer and Steel Secretary, Sandeep Poundrik, on Tuesday.
Addressing the CII Steel Summit 2025 in New Delhi, Poundrik said low prices of steel have turned into a big problem for small companies, which is also apparent in the less-than-expected September quarter earnings reports of most companies.
“Five years ago, prices of steel were higher than what they should have been. But today, prices of steel are lower than what they should be. So, price is a challenge, and small players are facing problems,” he said, adding, “Especially when we need to invest in 100 million tonnes of capacity in the next maybe five to seven years.”
Pointing out to the problem of plenty in countries like China, which are dumping cheap quality steel products in India, Poundrik said over-production in such nations impacts prices in countries like ours.
To counter this, the government is trying to ensure that domestic steel players get a level playing field, the steel secretary said.
“The government imposed provisional safeguard duty on imported steel to ensure that domestic steel industry doesn’t face any problem,” he added.
Also Read: Steel prices slump to 5-year low: Research firm
On a positive note, steel consumption and capacity are both increasing, Poundrik said.
“To cater to increasing consumption, new capacities are coming up in the last 10 years,” he said, adding that there is a need to protect the steel industry for long-term self-reliance.
“In India, it’s not only 3 or 4 big players, but 2,200 middle-level steel producing companies that contribute to 47 per cent of steel production,” he said.
“It’s a strategic sector, so if you become dependent on imports, then you may face problems because of geopolitical reasons which we are seeing today across the world,” Poundrik added, referring to high tariff imposed by the US on most countries’ products.
With the prices of hydrogen coming down much faster than expected, options to increase the production of ‘green steel’ will also increase, he stated.
“In the next five to 10 years, hydrogen will become a viable alternative to natural gas, so it can be used to produce green steel.”
To cater to specialty sectors like defense, Poundrik said there is a need to pump in more investments and focus on specialty steel.
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