Steel demand roars, consumption jumps 9%

Strong infrastructure and manufacturing demand support steel growth, but softer prices and rising raw material costs may pressure margins

Commodity Desk MUMBAI

India’s steel industry continued its growth momentum in May 2026, with crude steel production rising 2.9% year-on-year to 14.21 million tonnes, driven by strong demand from infrastructure, construction and manufacturing sectors.

  According to data released by the Steel Ministry on Thursday, finished steel production increased 7.7% to 13.94 million tonnes during the month. Finished steel consumption outpaced production growth, rising 9% year-on-year to 14.33 million tonnes, reflecting healthy domestic demand.

 Hot metal production recorded a 2% increase, while pig iron output stood at 0.77 million tonnes, up 1.1% from the same period last year. During the first two months of FY27, crude steel production reached 28.04 million tonnes, registering a 2.7% rise over 27.30 million tonnes produced in the corresponding period of the previous year. Finished steel production during April-May climbed 6.4% to 27.36 million tonnes.Steel consumption during the period also remained robust at 27.36 million tonnes, up 8.7% year-on-year. 

  The ministry attributed the growth to sustained activity across key user industries, particularly construction, infrastructure development and manufacturing. India’s steel trade also witnessed strong growth in May. 

  Steel imports rose sharply by 62.5% year-on-year to 0.69 million tonnes, while exports increased 29.9% to 0.51 million tonnes. For April-May, imports stood at 1.37 million tonnes and exports at 0.98 million tonnes, making India a net importer of steel during the period.

  The government highlighted that India’s crude steelmaking capacity has now reached around 220 million tonnes per annum (MTPA), keeping the industry on track to achieve the National Steel Policy target of 300 MTPA by 2030. Capacity expansion projects are also gathering pace.  State-run SAIL has approved the expansion of its Bhilai Steel Plant from 6.8 MTPA to 10.2 MTPA. Meanwhile, JSW Steel has started construction of its integrated steel plant at Paradip in Odisha, which will be developed in phases with a planned capacity of 13.2 MTPA.

  The ministry also said the Green Steel Initiative is gaining traction. As of May 31, green steel certificates had been issued to 94 producers across 15 states, with most certified products receiving the highest five-star rating.Meanwhile, raw material prices strengthened further in May compared with April, indicating continued demand across the steel value chain. Domestic steel prices remained under pressure during May. TMT/Rebar prices declined around 1.3% month-on-month, while HR Coil and GP Sheet prices slipped about 0.2%.  

  At the same time, raw material costs continued to rise.  NMDC increased iron ore prices by ₹200 per tonne, while international coking coal prices rose 2.8% to $239 per tonne.  Higher scrap prices also added to input cost pressures, raising concerns over producer margins despite robust demand growth. The sector is also witnessing strong investment activity as producers expand capacity to meet future demand.