Where is India's Steel Industry Headed? Small Mills Halt Production While Large Enterprises Continue Expansion

On Wednesday, November 5th, Mr. Sandip Pondrik, Secretary of the Indian Ministry of Steel, stated that due to persistently low domestic steel prices, approximately 150 small-scale steel producers across India have suspended production.

Steel Prices Hit Lows, Pressuring Small and Medium Enterprises to Halt Operations
This large-scale production halt reflects the severe challenges currently facing the Indian steel industry. Pondrik pointed out, "Current steel prices are below reasonable levels, making it difficult for many small producers to sustain their operations." It is evident that the continuously depressed market prices are first impacting small and medium-sized enterprises lacking scale and financial advantages, forcing them to choose shutdowns to avoid further losses.

Government Expansion Plans Clash with Industry Slowdown
This "wave of shutdowns" among small steel mills stands in stark contrast to the Indian government's grand plans.

According to the National Steel Policy of 2017, India aims to expand its crude steel capacity to 300 million tonnes by the fiscal year 2030-31 (April 1, 2030 – March 31, 2031). Driven by this goal, India's crude steel capacity has been steadily increasing in recent years. Data indicates that the country's crude steel production is expected to reach 149 million tonnes in 2024, a year-on-year increase of 6.15%.

Meanwhile, major steel enterprises represented by the Rashmi Group, the Jindal group of companies, and Vardhman Special Steels are still continuously advancing capacity expansion projects, with sustained growth in investment scale. This new capacity is mostly concentrated in the high-value-added steel segment, indicating that large enterprises are strengthening their future market competitiveness through product portfolio upgrades.

Steel Secretary Speaks Out: Must Safeguard Strategic Industry Autonomy
Facing the difficulties of small enterprises and the complex situation of the industry, Indian Steel Secretary Pondrik reiterated the strategic importance of the steel industry.

The senior-most official in the steel department emphasized the need to protect the steel industry to ensure India's long-term industrial self-reliance, stating that steel is a strategic sector crucial to the nation's economic and security interests. He added, "If we become import-dependent, we will face severe challenges due to geopolitical factors, as we are witnessing currently."

This statement not only addresses the current practical difficulties faced by small Indian steel mills but also reflects the widespread concern among nations regarding the security of supply chains for key basic industries during their industrial modernization processes.

Where is India's Steel Industry Headed Amid Structural Transition Pains?
On one side, approximately 150 small steel mills have halted production due to low-price impacts; on the other, large steel enterprises continue to expand production under policy guidance. The Indian steel industry is undergoing a profound structural adjustment.

This "two contrasting scenarios" industrial landscape also serves as a reminder that steel, as a basic industrial sector, has price fluctuations and capacity configurations that affect the overall situation. How to maintain the overall health of the industry and the survival space for small and medium enterprises while advancing capacity upgrades has become a long-term issue that Indian steel policymakers must address.

Supplementary Information:
During the talks, Minister Audu stated that the Nigerian government attaches great importance to the Xingxing Steel Plant project invested by Hongxing Zhongyuan Group in Ogun State and will continue to optimize the investment environment to provide strong support for the smooth progress of the project. He pointed out that the project is highly aligned with Nigeria's national steel industry development strategy and will effectively help the country become a steel manufacturing hub in West Africa.

The total investment for the Xingxing Steel Plant project is approximately $450 million (about 3.2 billion RMB). The project introduces 1450mm hot-rolled coil production line technology. According to the agreement, both sides will deepen cooperation in policy coordination, infrastructure support, and building localized supply chains. The project will adopt advanced steel production processes and is expected to create thousands of direct local jobs. Additionally, the Group will collaborate with Nigerian universities to establish talent training mechanisms, promoting technology transfer and local capacity building.