India only country among top 5 largest steel producers in world to see growth in production; China, US see decline

India has emerged as the sole nation among the top five steel producers in the world to witness growth in production during April, while others experienced declines of up to 7%.
According to an ET report by Nikita Periwal, China, the global leader in steel production, saw its April output decrease by over 7% year-on-year to 85.9 million tonnes. From January to April this year, China's production stood at 343.7 million tonnes, marking a 3% decline compared to 2023, according to data from the World Steel Association.

India, the second-largest steel producer worldwide, recorded a 3.6% increase in production, reaching 12.1 million tonnes in April. The country has achieved an impressive 8.5% growth in production between January and April this year, having produced 49.5 million tonnes of steel.

Japan, the United States, and Russia experienced a 2-6% year-on-year decline in steel production during the month. Apart from India, the four largest steel-producing nations have also witnessed a drop in their production numbers compared to the previous year, considering the January-April period, the financial daily’s report said.

The data suggests that while steel consumption in India remained strong, the global demand for steel is yet to recover. Sehul Bhatt, director for research at CRISIL Market Intelligence and Analytics, told ET, "High interest rates and inflation have culled demand from steel-consuming sectors in the western world. In 2023, crude steel production growth was flat on-year. It is expected to be rangebound in 2024."

This trend has impacted the March quarter earnings of most Indian steel-makers, as their selling prices were affected by high steel imports into the country. Reports indicate that India imported 600,000 tonnes of steel from China in the January-March period, a nearly 60% increase compared to the previous year.

Bhatt of CRISIL added, "Globally, steel prices are under pressure because of sluggish demand. This has also kept prices in India under check so far. While this is not a good tiding for steel mills, weak iron ore and coking coal prices since February are supportive for their profit margins."

The prices of hot-rolled coils of steel, used as a benchmark, were down nearly 10% year-on-year in the March quarter. However, prices have started to see an uptick in recent weeks, aligning with the pricing trend in global markets.