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ICRA Flags Margin Pressure Despite Steel Demand Growth

FY26 demand seen up 8 per cent, but prices to cap profitability

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Domestic steel demand in India is expected to grow by around 8 per cent in FY26, although softer steel prices are likely to keep profitability under pressure for producers, according to ICRA.

In a recent report, the rating agency projected the industry’s operating margin to remain largely flat at about 12.5 per cent in FY26, lower than its earlier expectation of an improvement. It noted that while demand growth remains healthy, incremental capacity additions have created a temporary surplus, resulting in continued pressure on steel prices.

“Although steel demand growth is projected at 8 per cent for FY26, additional supply has led to a near-term surplus, weighing on prices,” said Girishkumar Kadam, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA.

Domestic hot-rolled coil (HRC) prices, which had risen to Rs 52,850 per tonne in April 2025 following the imposition of a safeguard duty, corrected to around Rs 46,000 per tonne in November and are currently trading below import parity. At a global level, structural headwinds in China have pushed its steel exports to an all-time high of 88 million tonnes in the first nine months of calendar year 2025, further weighing on international prices.

Chinese HRC export prices averaged about USD 465 per tonne during the first seven months of FY26, compared with USD 496 per tonne in the corresponding period a year earlier. While India’s finished steel imports have declined sharply by around 33 per cent year-on-year in the current financial year, ICRA stressed that the continuation of the safeguard duty remains critical to prevent a resurgence in imports.

Under its base-case scenario, the agency expects domestic HRC prices to average around Rs 50,500 per tonne in FY26. Operating profit per tonne of steel production is estimated at USD 108, marginally lower than the USD 110 per tonne recorded in FY25. The overall sector outlook has been maintained at ‘Stable’.

ICRA also highlighted execution and balance-sheet risks linked to the industry’s large capacity expansion plans. Domestic steel producers are targeting capacity additions of 80–85 million tonnes over FY26–31, involving investments of USD 45–50 billion. However, the agency cautioned that unless earnings improve meaningfully, such large-scale investments could lead to a sharp rise in industry leverage over the medium term.

On green steel, Kadam said its share in India’s total steel demand is expected to rise from about 2 per cent, or roughly 4 million tonnes, in FY30 to nearly 40 per cent, or around 150 million tonnes, by FY50. However, he added that the economics remain challenging, with widespread adoption unlikely until green hydrogen prices decline to around USD 1.5–1.6 per kg, a level not expected in the near to medium term.

Concrete

Adani Group To Set Up Cement Factory In Madhya Pradesh

Chief Minister Mohan Yadav inaugurates plant in Guna

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Adani Group (Adani) will set up a cement factory in Madhya Pradesh, the chief minister of the state announced after an inauguration ceremony in Guna. The chief minister, Mohan Yadav, described the occasion as a historic day for the state and said the project will strengthen industrial capacity. The event was presented as a milestone in efforts to broaden manufacturing and attract large-scale investment. Officials said the facility will add to regional production capability and support related industries.

State officials outlined that the plant will enhance supply chains for construction and infrastructure projects across the region. The company will bring technical expertise and logistical resources to the site, with government agencies coordinating approvals and land allocation. Local suppliers and service providers will benefit from increased demand, and training initiatives will be developed to build workforce readiness. Officials indicated that the project complements broader plans to modernise industrial clusters in the state.

The state administration said it has facilitated clearances and infrastructure support to accelerate implementation. Local officials have coordinated with the company to ensure connectivity and utilities are in place ahead of commissioning. The chief minister emphasised that collaboration between private investors and the government aims to create sustainable economic growth. Community outreach programmes will address local concerns and establish grievance mechanisms as construction proceeds.

Officials said the inauguration in Guna marks a new phase in the state industrial story and will serve as a reference for future investments. Administrators noted that close monitoring and periodic reviews will guide timely execution and adherence to environmental and safety norms. The government affirmed its commitment to facilitating responsible industrial expansion while ensuring benefits reach local communities. Stakeholders will continue discussions on supply chain integration and long term maintenance arrangements.

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Concrete

Railways Boost Cement Movement by 170 Per Cent and Eye Fly Ash

New container wagons cut costs and speed turnaround

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Indian Railways has recorded a 170 per cent rise in cement movement in the last four months after reforms launched in November to promote rail based bulk cement logistics. The Union Railway Minister, Ashwini Vaishnaw, reviewed the container sector reforms and their implementation and described the shift as improving plant to market efficiency. The reforms introduced customised bulk cement tank containers and a bulk cement terminal policy to support multimodal handling and door to door solutions.

The new system has simplified loading and unloading by enabling mechanised operations and by reducing package losses compared with bagged cement transport. Since cement can move directly from manufacturing centres to consumption centres in standardised tank containers compatible with Ready Mix Concrete machines, two stages of handling have been eliminated and material loss has been reduced. The standard shape of the containers facilitates faster turnaround and lowers logistics costs for suppliers and builders.

The improved freight turnaround is helping to lower the delivered cost of cement, which can ease pressure on housing costs for the poor and middle class and support affordable construction. The reform is said to be environment friendly as dust generation during material transfer has fallen and fuel consumption and emissions have reduced due to modal shift from road to rail. The Make in India tank containers are designed for seamless movement between train and trailer and to enable efficient door to door movement while cutting congestion on roads.

Building on the cement reforms, officials were urged to tap the fly ash transportation market to convert industrial waste into national wealth. The minister noted that nearly 300 million metric tonnes (mn t) of fly ash is produced in the country while only about 13 million t is transported by rail and asked officials to substantially increase Railways share to serve brick kilns, cement industries and construction sites. Wider utilisation of fly ash should reduce pollution, promote recycling and lower construction material costs while strengthening sustainable freight movement across infrastructure sectors.

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Dalmia Bharat launches Weather 365 in East India

New water-repellent cement targets weather-resilient housing demand

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Dalmia Bharat Cement has launched Weather 365, a super-premium water-repellent cement brand for retail markets in West Bengal and Bihar. The product is designed to address rising demand for durable and weather-resistant construction materials in Eastern India.
Weather 365 offers protection against seepage, dampness and moisture damage, especially in regions exposed to heavy rainfall, humidity and changing weather cycles. The cement is suited for roofs, columns and foundations, and uses uniform water-repellent technology to reduce water penetration, steel corrosion, efflorescence and damp patches.
The company said the product will be available in water-resistant and tamper-proof BOPP packaging. It will also provide on-site technical support through engineering and technical services teams to guide customers on construction practices and long-term building performance.
Positioned in Dalmia Bharat Cement’s premium portfolio, Weather 365 targets homeowners, contractors and builders seeking stronger concrete, improved paint life and better structural durability. The launch supports the company’s strategy to expand premium construction solutions in key Eastern India markets.

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