Indian Steel Demand Overcomes Challenges Amid Growing Scrap Imports

Resilient Growth in Indian Steel Demand Despite Headwinds

India’s steel industry continues to expand in 2025, demonstrating resilience amid economic and sector-specific challenges. During Kallanish’s recent India Steel Markets webinar, analysts Aditi Tiwari and Suhita Poddar outlined a clear upward trajectory in steel production and consumption across the country. Average per capita steel usage is forecast to hit 160 kilograms by 2030, up from 105 kg in 2025 and 72 kg in 2020, indicating robust long-term demand fundamentals.

The Indian steel sector’s technological mix remains diverse, with 43% BOF, 35% IF, and 22% EAF capacity. This configuration highlights a rising reliance on ferrous scrap and direct-reduced iron (DRI), especially in the IF and EAF segments. Scrap usage in India has grown by 15% year-on-year in the first seven months of 2025, although its overall scrap utilization remains low compared to the U.S. (70%) and Europe.

Meanwhile, scrap imports surged 12.7% from January to July, reaching 5.3 million metric tons. India still imports roughly 25% of its scrap needs, primarily from the U.S. and Europe, while domestic scrap generation also grew 16.5% during the same period. These dynamics suggest a steady tightening of global scrap flows as India asserts its role as a key ferrous scrap buyer.

Steel Rebar Faces Headwinds While HRC Remains Strong

Despite overall industry growth, the Indian construction sector has faced delays due to election-related project restrictions and a seasonal monsoon slowdown. As a result, rebar prices have slumped, widening the price gap between rebar and hot-rolled coil (HRC). According to Poddar, this year has been “exceptionally challenging” for rebar makers, with construction stalled for nearly three months.

However, the sector expects a recovery. Poddar predicts that rebar prices have likely bottomed out, with the post-monsoon period expected to boost demand. HRC producers, meanwhile, are maintaining momentum by focusing on export markets, particularly to the UAE, Belgium, and Italy. These exports remain vital, especially as producers adapt to EU’s Carbon Border Adjustment Mechanism (CBAM) requirements.

Indian mills’ efforts to meet European climate standards will be crucial for sustaining exports, especially for HRC. This strategic shift reinforces India’s position not just as a consumer, but also as a responsible supplier in the global steel value chain.

SuperMetalPrice Commentary

India’s steel industry continues to stand out as a growth engine in the global metals market. While short-term rebar demand has dipped due to construction delays, the fundamentals remain intact, buoyed by increasing per capita consumption and expanding scrap demand. The shift toward scrap-based steelmaking signals India’s alignment with global sustainability goals, though its 23% scrap usage rate still leaves considerable room for expansion. As construction activity revives post-monsoon and export channels adapt to carbon compliance, India’s steel sector appears well-positioned for long-term strength—offering opportunities for global scrap suppliers and technology providers alike.