Nomura: Indian steel majors among best-positioned producers worldwide
Steel

Nomura: Indian steel majors among best-positioned producers worldwide

India's steel industry is set to expand significantly over the next few years, with plans to add around 23 million tonnes (MT) of crude steel capacity between FY24 and FY27, according to a report by Nomura.

As per the report, the industry is reflecting a compound annual growth rate (CAGR) of 4.8 per cent. The report noted that this growth target is in consistent with the industry's long-term average growth from FY15 to FY24.

Despite this substantial increase in capacity, experts believe that the Indian steel sector is poised to enter a favorable phase.

"We estimate India's steel industry will add approx. 23MT crude steel capacity over FY24-27F, at an implied 4.8 pc CAGR, in line with the FY15-24 long-term average" said the report.

The report noted that the steel majors JSW, JSPL, Tata Steel and ArcelorMittal & Nippon Steel should account for nearly 87 per cent of the ongoing capacity expansion. Although the report noted that significant capacity will come onstream over the next three years.

The JSW steel is set to add 7MT by FY28F at a 5 per cent CAGR over FY24-28F, according to the report. While the JSPL is set to add 6.3MT by FY27F at an 18 per cent CAGR over FY24- 27F.

The report also suggested that even under a conservative assumption of 6 per cent CAGR in steel demand through FY27 (compared to 7 per cent over the last five years), capacity additions are still expected to fall behind demand growth during this period. This could lead to an improvement in the domestic supply-demand balance, reducing the need for steel companies to rely on exports for volume growth.

"Improvement in domestic supply-demand fundamentals through FY27F would suggest reduced dependence on exports for volume growth" added the report.

India's steel companies are well-positioned within the global metals sector, according to analysts. These companies benefit from operating at the lower end of the global cost curve, mainly due to lower labor costs. Additionally, India's iron ore costs remain competitive compared to other countries, even for non-integrated steel producers.

The future expansion of India's steel industry is expected to be driven largely by brownfield projects, where existing facilities are expanded or upgraded. Strong domestic demand is another factor that could help reduce the industry's reliance on exports.

Over the past few years, India's steel production has grown at a 6 per cent CAGR between 2019 and 2023, far outpacing China's 1 per cent growth and the rest of the world's 1 per cent decline. With these factors in place, Indian steel companies are seen as some of the best-positioned producers globally, offering significant growth potential in the coming years.

"We believe Indian steel majors are among the best-placed producers globally" the report noted.

Your next big infra connection is waiting at RAHSTA 2025 – Asia’s Biggest Roads & Highways Expo, Jio World Convention Centre, Mumbai. Don’t miss out!

India's steel industry is set to expand significantly over the next few years, with plans to add around 23 million tonnes (MT) of crude steel capacity between FY24 and FY27, according to a report by Nomura.As per the report, the industry is reflecting a compound annual growth rate (CAGR) of 4.8 per cent. The report noted that this growth target is in consistent with the industry's long-term average growth from FY15 to FY24.Despite this substantial increase in capacity, experts believe that the Indian steel sector is poised to enter a favorable phase.We estimate India's steel industry will add approx. 23MT crude steel capacity over FY24-27F, at an implied 4.8 pc CAGR, in line with the FY15-24 long-term average said the report.The report noted that the steel majors JSW, JSPL, Tata Steel and ArcelorMittal & Nippon Steel should account for nearly 87 per cent of the ongoing capacity expansion. Although the report noted that significant capacity will come onstream over the next three years.The JSW steel is set to add 7MT by FY28F at a 5 per cent CAGR over FY24-28F, according to the report. While the JSPL is set to add 6.3MT by FY27F at an 18 per cent CAGR over FY24- 27F.The report also suggested that even under a conservative assumption of 6 per cent CAGR in steel demand through FY27 (compared to 7 per cent over the last five years), capacity additions are still expected to fall behind demand growth during this period. This could lead to an improvement in the domestic supply-demand balance, reducing the need for steel companies to rely on exports for volume growth.Improvement in domestic supply-demand fundamentals through FY27F would suggest reduced dependence on exports for volume growth added the report.India's steel companies are well-positioned within the global metals sector, according to analysts. These companies benefit from operating at the lower end of the global cost curve, mainly due to lower labor costs. Additionally, India's iron ore costs remain competitive compared to other countries, even for non-integrated steel producers.The future expansion of India's steel industry is expected to be driven largely by brownfield projects, where existing facilities are expanded or upgraded. Strong domestic demand is another factor that could help reduce the industry's reliance on exports.Over the past few years, India's steel production has grown at a 6 per cent CAGR between 2019 and 2023, far outpacing China's 1 per cent growth and the rest of the world's 1 per cent decline. With these factors in place, Indian steel companies are seen as some of the best-positioned producers globally, offering significant growth potential in the coming years.We believe Indian steel majors are among the best-placed producers globally the report noted.

Next Story
Resources

IGBC Launches 32nd Chapter in Ranchi to Drive Green Building Growth

The CII Indian Green Building Council (IGBC) has launched its 32nd Chapter in Ranchi to accelerate Jharkhand’s transition towards sustainable and resilient urban infrastructure. The launch event, held on September 6 at Radisson Blu Hotel, brought together government officials, industry leaders, and sustainability experts. Sunil Kumar, IAS, Principal Secretary, Urban Development & Housing Department, Government of Jharkhand, said, “The launch of the IGBC Ranchi Chapter marks a significant step in Jharkhand’s urban development journey. The state is committed to creating a policy e..

Next Story
Real Estate

Mindspace REIT Marks Five Years With 14.8 Per Cent Annualised Returns

Mindspace Business Parks REIT, owner and developer of a Grade-A office portfolio, has completed five years since its listing on the Indian bourses in August 2020. Despite debuting during the global pandemic, the REIT has delivered 14.8 per cent annualised total returns, expanded its portfolio, and reinforced occupier trust. Key achievements over five years include: Portfolio expansion of 30 per cent to 31.0 msf through acquisitions and new developments. Gross leasing of 25.2 msf, with occupancy sustained at 93.7 per cent. Cumulative distribution of Rs 55.9 billion to unitho..

Next Story
Real Estate

Great Value Realty Secures RERA Nod for Ultra-Luxury Ekanam Project

Great Value Realty, one of North India’s most trusted developers, has received RERA approval for its flagship ultra-luxury residential project, Ekanam (RERA No. UPRERAPRJ15109/2019). The announcement was made during the Great Partners Meet at Noida. Built on the only available land parcel in Sector 107, Noida, Ekanam embodies the company’s philosophy, “Great is the New Norm,” promising excellence in design, quality, and sustainable community living. With seamless connectivity to Noida Expressway, DND Flyway, metro stations, and proximity to the upcoming Jewar Airport, the project ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Talk to us?