AGENCY
NEW DELHI, june 12
The steel companies in India are likely to see an improvement in their margins in the first quarter of FY25. The improvement in the margins is driven by the price hike in March and April. However, the margin improvement could be short-lived as there might be a seasonal decrease in steel prices during the monsoon. Elara Capital highlighted that this, along with falling imports, continues to be a key worry.
Steel production and imports outlook in FY26
According to the Elara Capital report, India’s crude steel production in April stood at 12.9 million tonnes. The production in April grew by 6 percent on a year–on–year basis. The finished steel production also saw a similar production growth in the month.
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While the sector is seeing an increase in production. There has been a continuous drop in imports as well. The steel imports fell by 11 percent YoY and 10 percent on a month-on-month basis. This is the fourth consecutive month when India’s steel imports have fallen. The total steel imports in April stood at 0.52 million tonnes.
Global steel prices and fall in exports
Globally, the steel prices are seeing a softness in the first quarter of FY26. In China, the export prices of hot rolled coil (HRC) fell by 1 percent on a MoM basis. Similarly, the prices of HRC in the United States fell by 5 percent in May. In Europe and Japan, HRC prices remained stable.
In India, while the Hot-rolled coils and rebar prices are somewhat cooling down after a positive momentum of 3 months, the exports in April are seeing a decline. While the domestic rebar price decreased by 1 percent in May, MoM, the HRC prices remained stable. On the other hand, the steel exports of the country declined by 26 percent YoY and 17 percent MoM in April.
The Elara Capital report shows that Indian steel exports in April dipped primarily due to the low steel prices from China and low demand from the European Union and Vietnam, the two key markets for Indian steel.
India’s crude steel production outlook
In May, the crude steel production is seeing a growth, as per the early estimates of Elara Capital. While on a MoM basis the crude steel production growth was just 1 percent, on a YoY basis it was 6 percent.
The National Mineral Development Corporation is closely watching the price of steel raw material amid the global trade tensions. In May, it raised the price of lumps and fines, types of iron ore, by Rs 400 per ton. However, on June 4, it reduced the prices by 150 per ton to safeguard the end users.
