By India Steel Capacity Utilisation Seen Above 90% Through FY2029 on Strong Demand
India’s steel industry is expected to maintain capacity utilisation above 90% through FY2029 as domestic steel demand grows faster than capacity additions, according to Kotak Institutional Equities.
By Paul Ploumis
Published August 31, 2026
Key Points
- India’s steel capacity utilisation is expected to remain above 90% through FY2029.
- Kotak Institutional Equities expects domestic steel demand to grow nearly 7% annually between FY2026 and FY2029.
- Steel exports rose 35% year over year to 2.3 million tons, while imports increased 36.7% to 2.8 million tons.
- Primary and secondary rebar prices have risen by about INR 5,600 per ton following their June-July decline.
- Steel margins may weaken in the second quarter of FY2027 before recovering in the second half.
MONTREAL (Scrap Monster): India’s steel industry is expected to maintain capacity utilisation above 90% through FY2029, supported by strong domestic consumption and infrastructure activity, according to a recent research report published by Kotak Institutional Equities.
Steel Demand Growth Seen Outpacing Capacity Additions
The brokerage expects domestic steel demand to expand at nearly 7% annually between FY2026 and FY2029, significantly higher than the anticipated pace of capacity additions.
Domestic steel consumption grew 7.8% year over year in the first part of FY2027, following 7.7% growth in FY2026.
Steel Exports and Imports Record Strong Growth
Steel exports climbed 35% year over year to 2.3 million tons, while imports rose 36.7% to 2.8 million tons.
The report noted that ongoing anti-dumping investigations could help limit import pressure.
Rebar Prices Recover as Construction Activity Improves
Long steel prices have recovered strongly after their June-July decline. Rebar prices in both primary and secondary markets increased by about INR 5,600 per ton, reaching INR 53,900 and INR 47,900 per ton, respectively.
The easing monsoon and improving construction activity could provide further support to prices, the report said.
Meanwhile, domestic hot-rolled coil prices stood around INR 58,800 per ton.
Steel margins may weaken in the second quarter of FY2027, but recent price gains and better operating leverage are expected to support recovery in the second half.
