Indian steel exports are expected to see less growth in the coming months as overseas orders start to dry up.
According to an Elara Capital report, exports jumped by 83 per cent in October to 0.73 million tonnes. This fast pace is unlikely to continue as the surge happened because buyers in Europe bought more steel to stock up before a new carbon tax starts there.
However, the report said that new orders have stopped for December, except for small amounts of coated steel products.
The steel industry in India is facing several challenges at once. Steel production in the country grew by 6 per cent in October to about 13.6 million tonnes. Early data for November shows that production is still going up, but the prices of steel in India are falling. The price of a common type of steel called hot-rolled coil (HRC) dropped to about Rs 46,750 per tonne in November.
Raw material costs are also making things difficult for steel companies. While steel prices are going down, the cost of coking coal from Australia went up by 7 per cent.
Elara Capital expects that these companies will see their profits shrink in the third quarter because of these high costs and low selling prices. The report mentions that the market can only handle small price increases of about Rs 500 to Rs 1,000. Because of this, the report suggests that companies making aluminium might be in a better position than steel companies right now.
Global trends are adding to the pressure on the Indian market. Around the world, steel production fell by 6 per cent in October. China saw a big drop in its production by 12 per cent, yet its exports to other countries started to rise again. “China is expected to implement a steel export licensing mechanism from 1 January 2026, requiring exporters to obtain approvals for shipping a wide range of steel products, including billets, hot-rolled coils and stainless steel,” the report said.
India has tried to protect its own industry by making imports more difficult. Steel imports fell by 52 per cent in October because people expected the government to bring back special taxes.
New duties on steel from Vietnam and China also made importers more careful about buying from abroad. Even with these steps, the combination of slow demand at home and fewer orders from Europe is expected to keep the pressure on Indian steel makers in the near future.