India Sees Growth in Steel Production as Top 5 Producers, Including China and US, Decline

India has distinguished itself as the only country among the top five steel producers globally to report an increase in production in April, while other leading nations experienced declines of up to 7%.

According to a report by Nikita Periwal in the Economic Times, China, the world’s largest steel producer, saw its April output drop by over 7% year-on-year to 85.9 million tonnes. For the period from January to April this year, China’s production was 343.7 million tonnes, reflecting a 3% decrease compared to the same period in 2023, as per the World Steel Association data.

In contrast, India, the world’s second-largest steel producer, posted a 3.6% increase in production, reaching 12.1 million tonnes in April. Between January and April this year, India achieved a notable 8.5% growth in steel production, totaling 49.5 million tonnes. However, Japan, the United States, and Russia saw their steel production decline by 2-6% year-on-year in April. The report highlights that besides India, the other top steel-producing nations also experienced a reduction in production during the January-April period compared to the previous year.

The data indicate that while steel consumption in India remained robust, global demand for steel has not yet rebounded. Sehul Bhatt, director of research at CRISIL Market Intelligence and Analytics, explained to ET, “High interest rates and inflation have culled demand from steel-consuming sectors in the western world. In 2023, crude steel production growth was flat on-year. It is expected to be rangebound in 2024.”

This trend has affected the earnings of most Indian steelmakers in the March quarter, as their selling prices were influenced by significant steel imports into the country. Reports suggest that India imported 600,000 tonnes of steel from China during January-March, nearly a 60% increase from the previous year.

Bhatt of CRISIL noted, “Globally, steel prices are under pressure because of sluggish demand. This has also kept prices in India under check so far. While this is not a good tiding for steel mills, weak iron ore and coking coal prices since February are supportive for their profit margins.”

The prices of hot-rolled coils of steel, a benchmark product, fell nearly 10% year-on-year in the March quarter. However, prices have begun to rise in recent weeks, in line with global market trends.