India's stainless steel demand set for sustained growth amid economic expansion, infra development- BIR summit

• India's stainless steel demand set to grow by 6.5-7.5% till 2030
  
  
• Experts predict steady demand, stable pricing for stainless scrap in Asia
  
  

At the recent BIR World Recycling Convention in Singapore, key industry leaders convened to discuss the significance of recycled metal in decarbonization initiatives and to examine regional production and consumption trends. Here are some key takeaways from the event on the global stainless steel scrap market.

In a presentation at BIR World Recycling Convention, Jay Prakash Sahu, AGM at BigMint, in collaboration withQuesrow Research & Strategy Co., underscored the upward trajectory of India's steel and stainless steel demand. This growth aligns with India's economic expansion and substantial infrastructure investments, forecasting steel demand at 240-260 million tonnes (mnt) by 2035 and stainless steel at 6.5-7 mnt by 2030.

India's real GDP is expected to grow from $3.5 trillion in 2023 to $5.5-6 trillion by 2030, driven by government investments. The $1.4 trillion infrastructure plan (2019-2025) is poised to catalyze steel demand, while stainless steel demand may accelerate at 7-8% post-2025 due to expanding urbanization.

Despite stable imports of stainless steel flats, India has emerged as a net importer, relying on imports from China and ASEAN countries. Domestic production rose over 20% in FY'24, though actual scrap imports saw a restrained 3% growth due to a rise in semi-finished products and finished goods imports.

India's stainless steel industry faces challenges in raw material linkages, especially regarding nickel and scrap. Limited domestic nickel production and high import costs elevate production expenses, while restricted scrap generation and government recycling policies focus mainly on automotive and consumer goods. As the second-largest global producer and consumer, India's stainless steel demand outlook remains robust, with further growth anticipated as infrastructure and manufacturing expand.

To address these challenges, Indian stainless steel producers could benefit from partnerships with global recyclers to ensure a sustainable scrap supply, enhancing the industry's long-term growth and competitiveness.

Stainless steel market discussion during panel

Omar Al-Sharif, Director at Sharif Metals Group, noted that recyclers are facing challenges as European mills struggle to secure new orders, and significant imports of slab and nickel pig iron are affecting the market. Even after the summer holidays, many mills have reduced their scrap requirements for October.

In the US, uncertainty prevails due to the upcoming presidential election and expected interest rate cuts, which complicates conditions for stainless recyclers. Furthermore, US exports of recycled stainless steel dropped by 30% y-o-y to 212,000 t in January-July, partly because Indian buyers are opting for semi-finished products instead.

During the third quarter, demand for stainless steel scrap from Taiwanese mills remained stable, although competition from nickel pig iron has put pressure on prices. In South Korea, demand has been robust following maintenance completions, despite an influx of hot stainless coil from China, where supply exceeds demand. Japan's domestic stainless scrap consumption held steady, although exports dipped slightly, he added.

According to the World Stainless Steel Association, global production of stainless steel reached 58 mnt last year. Looking towards 2026, the implementation of carbon tax credits in Europe could push scrap discounts back to the long-term average of 80%. However, the ongoing oversupply of nickel units in Indonesia, which now represents 55% of the global market, is expected to keep nickel prices suppressed.

Looking ahead, Vegas Yang, CEO of Taiwan-based HSKU Raw Materials, predicted steady demand and stable pricing for stainless scrap in Asia. With nickel costs for 304 and 316 stainless steel remaining around $11,000/t for the past 18 months, he said that the scrap nickel discount would improve to 75-80% soon. As demand for stainless steel scrap increases, this discount rate may approach 100%, indicating a reduced gap compared to purchasing nickel directly.

The outlook for stainless steel is mixed, with stable prices expected in the near term. Demand for finished stainless steel is weak in Europe due to Germany's recession, and Chinese demand is also below expectations, as noted at the BIR's Convention.