India is set to witness a notable rise in steel production, projected to grow by almost 6% year-on-year, reaching 152 million tons by the end of FY2024/2025, which concludes in March 2025. This increase will primarily be fueled by the operations of steel mills utilizing blast furnaces, whose expansion plans were established before the global emphasis on decarbonization intensified.
The anticipated 6% rise in steel output translates to a 9% uptick in pig iron production, predicted to reach 95 million tons in FY2024/2025, up from 87 million tons in the previous year.
Given the dominance of the BF-BOF route in additional steel production, India's iron ore demand is projected to grow by 9% year-on-year, amounting to 255 million tons. Concurrently, domestic iron ore production is expected to see a 10% increase, reaching approximately 305 million tons during this period.
Demand for direct reduced iron (DRI), both gas and coal-based, is forecasted to rise by 5% to 54 million tons compared to the previous fiscal year. The country's DRI production capacity is poised to expand to 68 million tons by the end of FY2024/2025, with most output originating from secondary plants in central and eastern India. Sponge iron production in FY2023/2024 was recorded at 52 million tons, with expectations of further increases in the coming years.
Meanwhile, scrap demand in India is likely to remain stable at around 32 million tons, similar to the previous fiscal year. Domestically produced scrap is expected to account for 24-25 million tons, with imports making up 7-8 million tons. However, as local production ramps up, imports are projected to decline.
India's focus on stimulating iron ore beneficiation and transitioning to eco-friendly steel production continues, but the challenge of ensuring the availability of high-iron-content raw materials persists due to the expanding metallurgical capacity.
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