Steel demand in India will outpace the rest of the world in 2025, rating agency Crisil has predicted.

However, whether the buoyancy in the domestic market will translate to better numbers for the top producers will depend on the timely implementation of a safeguard duty.

Top producers who account for more than half of India’s steel production are under pressure from a surge in import of flat steel, which is consumed by the auto and consumer durables sectors.

In contrast, small and medium companies in the steel value chain, which produce long products that are used in the construction industry, are better off as import intensity in this segment is far less than in flat steel.

While the top producers have been lobbying for a safeguard duty, which has been backed by the Union steel ministry, there is no indication if the commerce ministry would agree.

“Domestic prices are under pressure because of global steel price decline and are expected to remain soft in 2025. Prices have a 4-6 per cent upside potential hinged on implementation of the safeguard duty,” Vishal Singh, manager research of Crisil Market Intelligence & Analytics, said in a note.

Crisil noted that there has been a surge in the import of hot rolled coil in the last three years in contrast to finished steel previously.

From an exporter of value-added products and speciality steel such as galvanised and coated steel, alloy steel and stainless steel to India, China has switched to hot rolled coil between 2022 and 2024.

While finished steel imports from China increased 2.4-fold, import of hot rolled coil — feed material to produce various value-added downstream products — jumped 28-fold, Crisil noted, adding that these imports are often at a discount to domestic hot rolled coil prices, creating price pressure on domestic steel.

Similarly, the overall finished steel import from Japan and Vietnam increased 2.8 and 8-fold in 2024 from the base of 2022, respectively, while hot rolled coil imports jumped 16.6 and 27-fold, respectively. As a result, hot rolled coil and cold rolled coil prices declined by 9 per cent and 7 per cent.

While a safeguard duty can push up prices, top producers such as Tata Steel and JSW are going to ramp up production volume from newly commissioned capacities, weighing on flat steel prices.

Sehul Bhatt, director research of Crisil, noted that crude steel production by top seven players remained flat ,while that of medium and small players increased by 14 per cent.

Crisil is predicting a 8-9 per cent growth in steel demand, led by the housing and infrastructure sector, compared with the global steel demand rising by 0.5-1.5 per cent.