look news india
New Delhi: For the first time in four years, the capacity utilization of the domestic steel industry has fallen below 80 per cent in FY2025, a four-year low. As cheap imports increase market share. On the other hand, the country’s steel import increased by 42.10 percent year-on-year to 57.68 lakh tonnes during the April to October period of the current financial year. Credit rating agency ICRA said annual capacity addition planned to range from 9 to 95 million tonnes, involving investments of $45 to 50 billion, risks downside unless earnings of domestic steel mills rise to current levels. It is possible
The domestic steel industry has added a capacity of 18.2 million tonnes per annum during the last financial year. Additional capacity of 15.3 million tonnes per annum will be added in the current year. However, domestic steel demand is expected to maintain a strong growth rate of 10 to 11 percent in FY2025. But local mills are struggling to protect their market share from cheap imports.
This is evident from the very low growth of five per cent in domestic finished steel production. Companies are seeing a similar situation in the current financial year also. Adding to the ongoing expansion plans at record levels, the industry’s capacity utilization rate is likely to decline from 85 per cent in FY2024 to an estimated 78 per cent in the current fiscal. This is the lowest level in the last four years.
In the race for expansion, major steel manufacturers have been raising the issue of cheap imports for some time. China, along with other major production and consumption centres, faces a weak economic growth outlook. Due to this, trade flows have been diverted towards more developed markets such as India. China’s share in steel imports into India in the seven months of FY 2025 was the highest at 30 percent.
Amid the continuous demand from the industry to reduce steel imports in the country, there is an increase in imports, which has increased the concern of steel companies.
During the April to October period of the current financial year, the country’s steel import has increased by 42.10 percent on an annual basis to 57.68 lakh tonnes.
Steel industry sources said domestic steelmakers have requested the government to protect their business due to the sharp increase in imports. Industry sources said there has been a demand to impose anti-dumping duty on certain types of steel to prevent cheap imports.
However, the micro, small and medium (MSME) sector of the country has opposed the increase in duty. The MSME sector argues that the increase in duty will make domestic and imported steel costlier, which will make MSME exports costlier.
Steel imports have grown at a CAGR of 5.29 percent during the period FY 2020 to FY 2024. India was becoming a net importer of steel in the last financial year. Most of India’s steel imports come from China, Japan and South Korea.