India to increase steel production to 152 million tons in FY2024/2025 – forecast

Demand for iron ore in the country will grow by 9% compared to the previous fiscal year

According to BigMint, steel production in India will grow by almost 6% y/y – to 152 million tons by the end of FY2024/2025 (ending in March 2025).

The main contribution to the projected steel production in the current fiscal year is expected to come from steel mills operating blast furnaces. Their expansion plans were developed long before the issue of decarbonization became a global concern.

Thus, estimates show that in the current balance, the share of blast furnace and oxygen furnace-box furnaces (BF-BOF) will be 43%, induction furnaces – 35%, and electric arc furnaces (EAF) – less than 22%.

A 6% increase in steel production implies a 9% increase in pig iron production in FY2024/2025, to 95 million tons, up from 87 million tons in the previous fiscal year.

As the BF-BOF route will account for the lion’s share of additional steel production, the country’s iron ore demand is likely to grow by 9% y/y in the current fiscal year to 255 million tons. Domestic production of this raw material is expected to increase by about 10% to about 305 million tons in the period.

Demand for DRI (gas and coal-based) is expected to grow by 5% to 54 million tons compared to the previous financial year. India’s direct reduced iron production capacity is set to increase to 68 million tons by the end of FY2024/2025, with most of the output coming from secondary plants in the central and eastern parts of the country. The country’s sponge iron production in FY2023/2024 amounted to 52 million tons. These volumes are expected to increase over the next few years.

At the same time, the demand for scrap in the country may remain unchanged compared to the previous financial year at around 32 million tons. The share of domestically produced raw materials will be 24-25 million tons, with 7-8 million tons expected to come from imports. BigMint predicts that its supplies from abroad will decline as local production grows.

As GMK Center reported earlier, India will stimulate iron ore beneficiation for the needs of the steel industry and its transition to environmentally friendly steel production. Due to the growth of metallurgical capacities in the country, the availability of raw materials with a higher iron content remains in question.