India's steel capacity utilisation to stay above 90% on strong demand: Kotak
- IBEF
- June 18, 2026
India’s steel sector continues to demonstrate strong momentum, with domestic steel demand rising 9% year-on-year in May 2026 and 8.7% in FY26-to-date. According to a report by Kotak Institutional Equities, the industry’s capacity utilisation is expected to remain above 90% in the medium term, supported by robust demand growth that is projected to outpace capacity additions. The report noted that demand expanded by 7.6% in FY26 following four consecutive years of double-digit growth, highlighting the resilience of the domestic market. Steel exports also increased by 30% year-on-year to 0.5 million tonnes in May 2026, although imports remained higher at 0.7 million tonnes. India’s expanding infrastructure pipeline, manufacturing growth and urbanisation are expected to continue driving steel consumption over the coming years.
The report further highlighted mixed price trends across steel products. Primary rebar prices declined by around Rs. 7,000 (US$ 81.38) per tonne from their April 2026 peak, while domestic hot-rolled coil (HRC) prices remained relatively stable, falling only by about Rs. 1,600 (US$ 19.94) per tonne amid seasonal weakness. HRC prices continue to trade at a discount to China’s import parity levels, reducing the likelihood of significant price corrections. Meanwhile, coking coal prices have increased moderately, and iron ore prices have remained largely range-bound, although NMDC iron ore fines prices have increased by around 20% compared with March 2026 levels. Kotak expects industry margins to improve sequentially as higher trade prices from the fourth quarter of FY26 are reflected in FY27 earnings, more than offsetting increases in coal and iron ore costs.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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