Steel is a metal that is used by almost all industries. It is a material used in manufacturing, construction, and others. It is used in households in the form of utensils.
This makes it one of the most important sectors in the economy. So, if there is any change in this, an impact on the entire economy is expected. Hence, evaluating and understanding this sector is crucial.
So, what factors are important to know before investing? Well, read this blog to find the top facts that you must know about the steel sector in 2025.
Facts to Know About the Steel Industry in 2025
The steel industry is growing with an increase in demand for it as a raw material, mainly in the infrastructure industry. Today, there are various players in this sector. Tata Steel and JSW Steel are the prime ones. Also, these are part of Nifty 50 and the Sensex. This makes steel companies crucial in economic growth.
Hence, you must know all its facts properly. The key facts to know are as follows:
1. Increasing Demand
Demand for steel in India is rising. It will grow by 8-9% by the end of 2025 against the previous years. This is more than the global demand expected to rise by just 0.5-1.5%. This is mainly due to the metal-intensive construction projects. Most of these are backed by government schemes. The prominent ones are Pradhan Mantri Awas Yojana and the Gati Shakti Master Plan.
2. Impact of Safeguard Duties
Imports are the biggest challenge for industries in India. This is mainly from countries like China and Vietnam. Hence, the steel ministry proposed a 25% safeguard duty on low-cost imports. This will protect domestic producers. Also, it will lead to a 4-6% increase in domestic steel prices in 2025. This will improve domestic prices in the long run as well.
3. Production Capacity Expansion
By the end of 2025, the crude steel production will be 195 million tonnes. It was 180 million tonnes in 2024. This is because the players have pushed their capacity. This is now around 14% for crude steel and 11.3% for finished products in 2024.
4. Technological Advancements
Various innovative technologies are supporting this sector. The integration of artificial intelligence (AI) and automation is supporting businesses greatly. It is enhancing operational efficiency. It also reduces the downtime and improves product quality.
5. Electric Arc Furnaces (EAF)
The adoption of EAF is now rising. This enables the use of recycled scrap steel. This significantly lowers greenhouse gas emissions compared to traditional methods.
EAF technology is becoming increasingly popular. It is mainly due to its flexibility and reduced environmental impact. Sustainability will also be a reason for this increasing demand.
6. Sustainability and Green Steel Initiatives
The steel industry increasingly focuses on green steel technologies. This is to meet the decarbonization targets. It is driven by innovations like hydrogen-based production and carbon capture utilization and storage (CCUS).
In the same context, Tata Steel recently got approval for the Green Steel plant in the UK which will be supported by GBP 500 million in government funding. This has given Tata Steel share price a boost in 2025.
This shift and developments are the reasons why the steel industry is expected to grow exponentially.
Conclusion
The steel sector in 2025 presents a compelling investment opportunity, especially in India. With the projected growth, the industry has potential to have strong growth and high profitability. Technology and sustainability are going to be the prime factors pushing this.
So, investors who are planning to invest must look for all these factors. Proper analysis and understanding will ensure that your investment grows over time.
