Indian steelmakers to increase capacity by more than 22 million tons in 2024

India’s leading steel companies, including JSW Steel and Tata Steel, plan to invest heavily in increasing steel capacity by at least 22 million tons per year in the 2024/2025 fiscal year. This was reported by Nasdaq.

Indian companies are trying to increase production capacity to record levels to capitalize on growing domestic demand for steel amid a surge in economic activity and infrastructure development. The rapid development of India’s economy is attracting the attention of steel producers from around the world, so local producers are trying to expand their operations so that planned projects can be implemented using a high share of domestic product. At the same time, steel consumption is declining in Europe and the United States.

In FY2024/2025, Jindal Steel and Power is expected to add 6 million tons of capacity to the existing 9.6 million tons, and Tata Steel is expected to add 5 million tons to the existing 21 million tons. JSW Steel, the largest steel producer in India, said it plans to increase production to 38.5 million tons per year, up from 27.5 million tons per year.

Although the companies did not disclose the planned costs of the capacity expansion, analysts predict that this figure will be measured in billions of dollars.

«We expect JSW Steel will spend $2-$2.2 billion a year towards brownfield expansions, scaling up its iron mining capacities in Odisha, raw material efficiency projects and downstream projects,» said Hui Ting Sim, an assistant vice president, Moody’s Ratings in Singapore.

JFE Steel and JSW Steel previously announced that they would invest 55 billion rupees ($662.85 million) in an Indian electrical steel joint venture. Tata Steel will invest $1.2-1.5 billion in development.

According to S&P Global Ratings, steel consumption will grow by 8-10% in the 2024/2025 financial year. Between April 2023 and January 2024, steel consumption in India increased by 14.5% – to 112.5 million tons, a six-year high.

In FY2024/2025, India plans to increase capital expenditures on infrastructure by 11.1% year-on-year – to INR 11 trillion ($134 million). This decision will increase domestic demand for steel, stimulating private investment and job creation.

In 2023, India increased steel production by 11.8% y/y – to 140.2 million tons. It is ranked second in the top ten steel producing countries by World Steel.