The Proposed Duty on Steel Imports Could Make Pricing Soar in 2025: Crisil

According to rating agency Crisil, Indian steel prices are expected to rise considerably, given that the proposed safeguard duty on steel imports will be implemented before the end of February. The domestic steel market in India has been under pressure lately, given that steel prices have fallen globally, although Indian demand remains robust. Crisil thinks that due to the safeguard duty, price increases of 4-6% would occur in the steel market, with a more pronounced impact in the first half of 2025.

Though demand for domestic steel is expected to soften in 2025, Vishal Singh, Director-Research at Crisil Market Intelligence and Analytics, expressed that increased supply due to new production capacities could allow flat steel prices to fall. Rising competitive forces among mills to grab market share tend to diminish the extent of price rise as well.

Indian steel prices fell in 2024 due to soaring imports and improved steel availability. HRC prices fell 9%, and cold-rolled coil prices 7%, to moderate revenue growth for domestic mills. However, poor coking coal prices have eased margin pressure on producers. In particular, coking coal prices for the premium low-volatility grade fell by a whopping 12% from a year ago in 2024, providing a cushion to domestic steelmakers.

Research on demand in 2025 predicts it to outstrip that in other major steel-consuming countries owing to an increase in demand for housing and infrastructure, as well as sustained demand from engineering, packaging, and several other industries, putting growth between 8 and 9%.

Global steel had fallen in demand by 1% in 2024 already due to a 3.5% drop in steel consumption in China, while the demand in developing economies like India and Brazil continues to rise. The supply of steel in India has increased by 11%-playing an important role in stabilizing global demand.