India’s expansion plans to reshape Asia’s stainless steel and raw materials markets
India aims to expand the stainless steel capacity to 9.3-9.5 million tonnes by 2030, then to 12.5-12.7 million tonnes by 2040 and finally to 19-20 million tonnes by 2047, according to a report published by Indian Stainless Steel Development Association (ISSDA).
The sector’s capacity was 6.6-6.8 million tonnes in 2022.
The expansion plans are based on anticipated economic growth and a potential rise in demand, the ISSDA said in the report.
And, according to the Credit Rating Information Services of India Ltd (CRISIL), India aspires to become a $40 trillion economy by 2047, with sectors such as construction, infrastructure and manufacturing all driving up demand for stainless steel.
CRISIL said it expects stainless steel consumption to increase from the current 2.5 kg per capita to 6.6-6.8 kg per capita by 2030, to 8-9 kg per capita by 2040 and to 11-12 kg per capita by 2047.
In the medium term, India’s leading stainless steel producer, Jindal Stainless, plans to commission an additional 1.0-1.1 million tonnes of stainless flat steel production capacity in 2025, the ISSDA said.
Asia stainless steel trade flow to change
China and Indonesia are currently the major exporters of stainless steel in Asia and India is one of the major buyers.
But market participants told Fastmarkets they expect the increase in India’s stainless steel production to significantly change trade flows across the whole Asian market.
China exported 120,653 tonnes of cold rolled stainless flat steel up to 0.5 mm thick to India in January to November in 2024, accounting for 27% of China’s total 438,853 tonnes of exports, according to Chinese customs data.
“The potential decline in Indian imports of Chinese stainless steel, although not expected in the [immediate future], will see Chinese exporters seek out alternative markets – particularly those that do not levy tariffs on Chinese products,” an exporter in China said.
And an exporter in Indonesia concurred.
“The current supply of stainless steel in India falls short of demand, so it is doubtful that supply will catch up within the next few years,” the Indonesian exporter told Fastmarkets. “Consequently, India is likely to continue importing stainless steel.
“But in terms of [India’s] long-term strategy, it is essential for it to investigate [the scale of] demand for other varieties of stainless steel – beyond the currently most-exported stainless flat steel,” the exporter added.
The role of tariffs
India plans to impose tariffs on steel products to support the development of its domestic steel mills, including those producing stainless steel. And that will force exporters in China and Indonesia to reduce exports to India and look to buyers elsewhere, such as those in the Middle East and Southeast Asia.
“The type 200 stainless steel exported from China will be influenced by the possible tariffs because China and India are the two major producers [of this grade] and are competitors in the international market,” a second exporter in China said.
And the Indonesian exporter said: “As the biggest supplier of type 300 stainless steel, Indonesia’s exports will also be under downward pressure from the potential tariffs.”
Declining ferro-chrome exports
India is one of the major ferro-chrome producing countries in the world to use locally-mined chrome ore, Fastmarkets understands.
And India’s ferro-chrome capacity is high enough to support the stainless steel expansion plan, but it may have to diversify to ensure its supplies, according to sources.
“Around 50% of ferro-chrome produced in India is [currently] exported to the seaborne market,” an Indian ferro-chrome source said. “The producers will reduce those exports and supply more to local buyers, in line with the expansion of the downstream stainless steel industry in India.”
Another ferro-chrome source said: “It will not be a problem to cater for the stainless steel expansion plan [in India], but sufficient access to supplies of chrome ore may be an issue.”
The same source added that India’s higher stainless steel capacity may attract supplies of chrome ore from international miners to fill any shortages.
Increasing imports of nickel-containing feedstock
With no known domestic sources of the key stainless raw material nickel, Indian steel producers are heavily reliant on imports. And market participants told Fastmarkets they expect nickel consumption and imports to India to grow further as it implements the stainless steel expansion plans.
In the first 10 months of 2024, India imported 178,527 tonnes of nickel pig iron (NPI) and ferro-nickel from Indonesia – the world’s largest nickel producer – a 143.47% surge from the same period in 2023, when about 73,300 tonnes were imported, according to the latest customs figures.
The need for nickel supplies has driven Indian stainless steel producers to invest outside the country to secure supplies, sources said.
Jindal Stainless, for instance, commissioned a 200,000 tonnes per year NPI smelter in Indonesia’s Halmahera Islands in August 2024, in a joint venture with Indonesia’s New Yaking. Jindal Stainless said the NPI produced will have an average nickel content of 14%.
“The growth in India’s imports of nickel-containing feedstock and related investments are directly related to the growth in its stainless steel sector,” a China-based nickel source said.
“India’s ambitious [stainless steel] expansion plans will further boost the country’s nickel consumption, which means India will purchase more raw materials, including ferro-nickel and NPI, from Indonesia and other countries,” the source added.
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