New Delhi

Growth in India’s steel exports is expected to moderate in the coming months as overseas demand weakens, according to a report by Elara Capital.

Steel exports surged 83 per cent year-on-year in October to 0.73 million tonnes, driven largely by pre-buying from European customers ahead of the implementation of a carbon tax. However, the brokerage noted that fresh export orders have largely dried up for December, barring limited demand for coated steel products.

Domestic challenges are also mounting for steelmakers. Crude steel production rose 6 per cent in October to around 13.6 million tonnes, with early November data indicating continued output growth. At the same time, domestic steel prices have declined, with hot-rolled coil prices falling to about Rs 46,750 per tonne in November.

Pressure on margins has intensified as raw material costs remain elevated. Prices of Australian coking coal increased by around 7 per cent even as steel prices softened, the report said.

Elara Capital expects profitability of steel companies to weaken in the third quarter due to limited pricing power, noting that the market can absorb price hikes of only Rs 500–1,000 per tonne. Against this backdrop, aluminium producers are seen as relatively better positioned.

Global trends are adding to the pressure. World steel production declined 6 per cent in October, while China’s output fell 12 per cent. Despite this, Chinese steel exports have begun rising again. The report added that China is expected to introduce a steel export licensing mechanism from January 1, 2026.

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In India, steel imports fell 52 per cent in October amid expectations of safeguard duties and the imposition of fresh levies on imports from Vietnam and China. Nevertheless, weak domestic demand and easing export orders are likely to keep near-term pressure on Indian steelmakers, the report said.