June 3, 2025
Jefferies identifies India as the only major economy to show consistent volume growth in commodities like steel, coal, and aluminium
The country's carbon and stainless steel consumption grew at a 7–8% CAGR over the last 15 years, exceeding real GDP growth
Jefferies projects an 8–10% CAGR in steel volumes and a 5% CAGR in coal volumes from FY25 to FY27
Domestic steel prices dropped 15% in late 2024 due to Chinese imports, prompting a temporary 12% safeguard duty in April 2025
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 emphasised 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.
To counteract the influx of cheaper imports, the Indian government imposed a 12% safeguard duty on flat steel imports in April 2025, set to remain in effect for 200 days. A final review of this policy is expected between August and September 2025.
Following the imposition of the duty, domestic steel prices have rebounded by 14% in the current calendar year-to-date, reaching INR 3,500 per tonne. This price is now about 5% higher than the cost of imported steel.
Lofferies forecasts that Indian steel prices will average between INR 52,000 and INR 53,000 per tonne in FY26 and FY27, 1–3% lower than current spot levels but well above late 2024 lows.
Source: Economic Times