Steel Demand Outpaces Production Growth as Further Price Upside Remains Limited: Equirus Securities
Mumbai, October 20, 2026: India’s domestic steel consumption is projected to grow by 7 percent year-on-year to 175.8 million tonnes in FY27, driven by infrastructure spending, private capital expenditure, and strong automotive demand, according to a press release detailing an analysis by Equirus Securities. However, further increases in domestic steel prices are likely to be constrained as prices approach the US$675-per-tonne safeguard-duty threshold and the price differential with Chinese steel widens.
During the first half of FY27, finished steel consumption grew 7.5 percent year-on-year to 84.9 million tonnes, while crude steel production grew by 2.9 percent to 85.1 million tonnes. This gap between demand and production growth, coupled with supply constraints at secondary steel producers and Rashtriya Ispat Nigam Ltd (RINL), drove a sharp rise in domestic prices in August and September 2026. Secondary steel output dipped by an estimated 1.5 percent after adjusting for industry reclassifications, while RINL production fell approximately 6 percent.
India maintained its status as a net steel importer in the first half of FY27, with exports rising 26.2 percent year-on-year to 3.5 million tonnes and imports increasing 23.8 percent to 4.1 million tonnes. Imports remained elevated despite safeguard measures introduced in April 2025, largely due to duty exemptions available under the Advance Authorisation Scheme for export-oriented manufacturers.
With broad price realisations expected to remain capped, Equirus Securities noted that investment focus is shifting toward stock-specific opportunities driven by capacity expansions and valuations. The brokerage upgraded Jindal Steel and JSW Steel to “LONG” following share price corrections, while maintaining a “LONG” rating on Godawari Power & Ispat Ltd (GPIL) despite cutting its FY27 EBITDA estimate for the firm by 31.2 percent due to mining ramp-up delays.
