India's domestic steel consumption is expected to grow by 9-10% in the current financial year, according to a report by rating agency ICRA on Thursday.
Steel demand was robust in the first quarter of FY2025, with consumption rising by 15% year-on-year amid competitively priced imports.
ICRA projects a "healthy" 9-10% growth in steel consumption this year. However, demand may see a temporary dip this quarter due to the monsoon season, with government capital expenditure likely to pick up in the latter part of the year.
The rating agency forecasts capacity utilisation to hit a decadal high of 88%, despite record capacity additions of 15.6 million tonnes per annum (MTPA) and rising imports.
For the past three years, the steel sector has experienced its fastest growth since the global financial crisis. In FY2024, consumption grew by 13.6%, just shy of the 13.9% peak recorded in FY2006 during India's private sector investment boom.
ICRA noted that steel is a globally traded commodity, and external factors, including China’s sluggish economic growth, have influenced trade flows, redirecting imports to high-growth markets like India. Finished steel imports have been on the rise since FY2023.
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