India defies global steel slump with 33% output growth since 2019

India is emerging as a global outlier in the steel sector, recording a 33% surge in output between 2019 and 2024, even as global steel production contracted by 1% over the same period. According to a recent report by Jefferies, India stands out as the only major country showing significant volume growth in commodities.

Jefferies noted that India remains a bright spot in a world experiencing stagnant or declining commodity volumes. The report emphasized that India is among the few economies witnessing consistent volume growth across key commodities, such as carbon steel, stainless steel, coal, and aluminium.

Over the last 15 years, India's carbon and stainless-steel consumption has expanded at a compound annual growth rate (CAGR) of 7-8%, exceeding the real GDP growth by a multiple of 1.1 to 1.3. This trend is expected to continue, with Jefferies projecting an 8-10% CAGR in steel volumes between FY25 and FY27. The rise in power demand will also likely boost coal volumes by 5% CAGR during the same period. Meanwhile, aluminium demand has sustained a 7% CAGR from 2017 to 2024, and Jefferies expects similar growth to persist through FY25-27, within the range of 7-8%.

Despite these growth indicators, India's domestic steel market experienced pricing pressure in the second half of 2024. A combination of falling Chinese steel prices and a rise in steel imports into India contributed to a 15% decline in hot-rolled coil (HRC) steel prices between June and December 2024.