Posted on 15 Oct 2025
India’s smaller steel producers are reducing output as weak demand, rising inventories and falling prices hit margins, Kallanish learns from local sources.
Construction and manufacturing slowdown, combined with seasonal monsoon rains, is weighing on steel consumption. Many small mills especially rebar producers are reporting lower orders from builders and infrastructure projects.
Despite recent government tax cuts aimed at stimulating overall consumer demand, sales have not recovered.
Some mills report inventories at multi-month highs, forcing production cuts. “We have trimmed output to avoid piling up stock we cannot sell,” a Raipur based rebar producer tells Kallanish.
He adds: “Steel demand is under acute pressure due to weak demand, high stock levels, and slow buying during festivals, though some recovery may happen later in October, but chances look grim at the moment.”
India’s steel consumption in September rose 9% year-on-year, but gains are uneven across segments. Smaller rebar producers are still struggling while larger players with captive supply remain relatively stable.
“Finished steel prices are falling faster than raw material costs. If conversion charges are not available, we cannot increase production. That is the main problem,” adds another Raipur-based mill source. Raipur’s billet prices reached a four-year low, forcing 20-30% of induction furnaces and rolling mills to reduce output as weak demand, high inventories, and firm raw material costs squeeze margins.
Market experts warn that without stronger infrastructure spending or import protections many small steelmakers will continue to face high inventories and low margins and may be forced to temporarily shut.
“The market remains challenging for mills without captive supply,” says a Mumbai-based steel consultant.
Source:Kallanish
