Indian steel prices in 2025 will be “much higher” if the proposed safeguard duty on imports is imposed, Indian rating agency Crisil said in a sectoral report on Thursday, January 9.
The impact is expected to be more prominent in the first half of 2025, the report said.
“Domestic prices are under pressure due to global steel price declines and are expected to remain soft in 2025. Prices have a 4-6 percent upside potential hinged on the implementation of the safeguard duty,” Crisil said.
As mills ramp up production volumes from newly-commissioned capacities, the increase in supply will reduce flat steel prices, but they will still be higher than the average prices of 2024, Crisis said in its report. “That said, intense competition among mills to gain market share could limit the upward movement,” it added.
In 2024, Indian domestic steel prices declined, impacted by additional material availability due to the increase in net imports. Hot rolled coil (HRC) prices declined by nine percent and cold rolled coil (CRC) prices declined by seven percent, thereby slowing the topline growth of domestic mills, the report noted.
However, the rating agency also said that falling coking coal prices, along with low volatility, helped reduce the pressure on margins “somewhat”.
Coking coal spot prices for the premium low volatility grade, Australia-origin, declined by 12 percent in 2024, whereas iron ore prices are estimated to have increased by 9-10 percent during the period, it said.
China HRC export prices declined by 12 percent year on year in 2024 and are still trading at a discount to domestic mills’ prices.
The report also said that steel demand in India will continue to outpace other major steel consuming economies in the calendar year 2025 with a growth of 8-9 percent, driven by a shift towards steel-intensive construction in the housing and infrastructure sectors along with better demand from engineering, packaging and other segments.
In 2024, global steel demand is estimated to have declined by one percent. Demand in China, the largest global steel producer and consumer, declined by 3.5 percent, led by falling steel demand from the real estate sector, despite conducive policy changes and the release of support packages.
Steel demand from Europe, Japan and the US also logged an estimated demand decrease of two to three percent. “However, demand growth in developing economies such as India and Brazil kept global demand from declining steeply. Demand is estimated to have increased 11 percent in India, 5.6 percent in Brazil and 2.7 percent in other steel consuming economies,” Crisil said.