Steel demand outpaces output in H1 FY27 as India’s imports surge 24 pc

THEBUSINESSBYTES BUREAU

NEW DELHI, OCTOBER 6, 2026

India’s steel industry maintained steady growth in the first half of FY2026-27, with crude steel production rising 2.9 per cent year-on-year to 85.1 million tonnes (MT) even as domestic consumption grew at a much faster pace, pointing to robust underlying demand across the economy.

Finished steel consumption increased 7.5 per cent to 84.9 MT during April-September 2026, compared with 79 MT in the corresponding period last year. In September alone, consumption rose 8 per cent to 14.4 MT, while finished steel production grew 1.9 per cent year-on-year to 13.5 MT.

The widening gap between domestic demand and production was reflected in trade flows. Finished steel imports jumped 23.8 per cent to 4.14 MT in the first six months of FY27, while exports increased 26.2 per cent to 3.55 MT. India consequently remained a net importer of finished steel in volume terms during April-September.

In value terms, imports rose 40 per cent to ₹43,690 crore, significantly faster than the 28.9 per cent increase in exports to ₹28,264 crore.

Crude steel production stood at 14.1 MT in September 2026, up 3.4 per cent from 13.7 MT a year earlier. Hot metal output was broadly flat at 7.9 MT, while finished steel production rose to 13.5 MT from 13.2 MT.

For April-September, hot metal production increased 2.5 per cent to 48.3 MT, while finished steel output climbed 3.7 per cent to 81.8 MT.

The country’s installed crude steel capacity stood at 222.9 MT annually, with the top seven producers accounting for 117.4 MT of capacity and producing 47.7 MT of crude steel during the period. The remaining producers contributed 37.4 MT.

The top seven producers comprise SAIL, RINL, NSL, TSL Group, AM/NS, Jindal Steel Limited (formerly JSPL) and JSW Group.

The public sector accounted for 15.5 per cent of crude steel production and 29.4 per cent of hot metal output during the first half, while its share in finished steel production stood at 13.5 per cent.

Raw-material availability and downstream integration also gained traction during the period.

NMDC commissioned its 2 MT per annum pellet plant at Nagarnar in Chhattisgarh, completing an integrated ₹5,427-crore project comprising an iron ore processing plant at Bacheli, a 135-km slurry pipeline with 15 MT annual capacity and the pellet plant.

The facility uses Straight Grate Induration technology and is expected to enable greater value addition from Bailadila iron ore fines and slimes while reducing dependence on road transportation.

NMDC’s iron ore production rose 8 per cent year-on-year to 4.04 MT in September, taking its H1 FY27 output to 27.3 MT, an increase of nearly 23 per cent over the year-earlier period.

The steel ministry has also moved to strengthen safety governance across the industry with the proposed Steel Industry Safety Council (SISC), an apex body to be chaired by the Secretary, Ministry of Steel.

A dedicated Steel Industry Safety Directorate will support the council through safety audits, investigation of serious incidents and development of safety standards suited to Indian operating conditions. The framework is expected to cover steel producers as well as CPSE mines.

At the company level, SAIL’s Rourkela Steel Plant has commissioned an AI-based safety surveillance system at its Hot Strip Mill-2. Using 10 IP cameras and computer vision, the system can identify helmet violations and trigger automated alarms, while also maintaining time-stamped records of incidents.

Future phases are expected to expand surveillance to other personal protective equipment violations, unsafe acts, fire and other workplace hazards.

SAIL has separately signed an MoU with Bharat Coking Coal Limited for the joint development and operation of its Indikatta Ramnagore Coal Block and BCCL’s East of Damagoria (Kalyaneshwari) Coal Block in West Bengal, strengthening efforts to develop domestic coking coal resources.

The industry’s decarbonisation drive is also gaining ground. Under the Ministry of Steel’s Green Steel Initiative, 101 distinct steel producers had been issued Green Steel Certificates through the lists released up to September 2026.

The certification spans products ranging from TMT bars and HR/CR coils to plates, wire rods and pipes. A large majority of certified products have received five-star ratings, indicating growing adoption of lower-emission steelmaking practices.

Research infrastructure for the next phase of decarbonisation is also being built. Jadavpur University, in partnership with SAIL, DVC and HURL, is establishing a ₹8.18-crore Centre of Excellence for green hydrogen research, one of four centres approved by the Ministry of New and Renewable Energy.

SAIL is expected to test and apply technologies developed at the centre at its facilities, potentially supporting wider use of green hydrogen in steel, power and fertiliser production under the National Green Hydrogen Mission.

With domestic steel consumption expanding significantly faster than production in H1 FY27, the sector enters the second half of the fiscal with strong demand momentum but also rising import dependence. At the same time, investments in pellets, domestic coking coal, workplace safety, AI and green hydrogen indicate that the industry’s next phase of growth is increasingly being shaped not just by capacity expansion, but by value addition, technology and decarbonisation.