India’s steel industry is expected to experience a strong first quarter in the current fiscal year, driven by high domestic steel prices and the continued protection of safeguard duties. The stability of coking coal prices, a key raw material, is expected to remain stable during this period, providing a predictable foundation for production costs. Although a temporary slowdown is anticipated in the second quarter due to monsoon-related disruptions in construction activity, this is a normal cyclical fluctuation and not a cause for concern.
Major steel producers, such as JSW Steel Ltd. and Steel Authority of India Ltd., are optimistic about their prospects, citing robust domestic demand fueled by infrastructure projects and economic growth. These companies are focusing on strategic planning and execution of their capital expenditure plans, aiming to increase efficiency and expand capacity, which should further boost their profitability.
The Indian steel industry is also relatively insulated from recent global trade developments, such as the US tariff hike on steel and aluminum. Since India’s direct steel exports to the US account for a small fraction of its total exports, the impact of this tariff hike is expected to be limited. In fact, India’s combined steel and aluminum exports to the US stood at just $4.56 billion in the previous fiscal year, a relatively minor proportion of its total exports.
Overall, the outlook for the Indian steel industry remains positive, driven by strong domestic demand, stable raw material costs, and limited exposure to global trade tensions. As the industry continues to grow and expand, major players are well-positioned to capitalize on emerging opportunities and drive long-term profitability. With a focus on strategic planning, efficiency, and capacity expansion, Indian steel-makers are poised for a robust performance in the coming quarters.