Steel Demand Outpaces Capacity Growth as Prices Rebound After Monsoon Weakness
What Happened
Kotak Institutional Equities expects India's steel demand to grow faster than capacity additions through FY2029, keeping domestic capacity utilisation above 90%. Strong industrial activity and infrastructure spending continue to support steel consumption, which grew 7.8% year-on-year in FY27 to date, following 7.7% growth in FY26.
Key Takeaways
Steel prices are recovering after the monsoon slowdown. Long steel prices have risen about 12% over the past month, reversing the June-July correction, while improving demand and the retreating monsoon could support further gains. Kotak believes robust domestic demand and constrained capacity additions should keep the sector in a favourable position over the medium term.