News
10/03/26
Demand fails to lift stainless steel utilisation: ISSDA
Mumbai, 10 March (Argus) — India's stainless steel capacity utilisation remains
below potential despite strong infrastructure-led demand, because subsidised and
low-grade imports continue to undercut domestic producers, according to the
Indian Stainless Steel Development Association (ISSDA). The health of India's
stainless steel value chain must be assessed on structural fundamentals rather
than production volumes alone, ISSDA president Rajamani Krishnamurti told Argus
. Infrastructure-led demand in India is rising strongly, yet domestic capacity
utilisation remains below potential. This reflects distorted market conditions
in which subsidised and low-grade imports consistently undercut higher-quality
domestic output, Krishnamurti said. Even facilities capable of producing
global-standard material are operating below optimal levels despite healthy
underlying demand. Dependence on imported raw materials remains another
structural challenge, he said. India continues to rely on imported inputs even
though stainless steel is fully recyclable and retains intrinsic value through
scrap recovery. Strengthening the domestic scrap ecosystem would not only reduce
import reliance but also support circularity, resource efficiency and
decarbonisation goals. The lowest-cost (L1) tendering model prioritises
immediate savings over durability and lifecycle performance. Shifting to
life-cycle cost analysis (LCCA) in public procurement would reward
higher-quality materials, improve infrastructure longevity and provide clearer
demand signals for domestic producers, Krishnamurti said. Policy interventions
have begun addressing some of these distortions. Recent measures, particularly
quality control orders (QCOs), have strengthened market standards by ensuring
that material entering the country meets minimum safety and performance
thresholds. These rules have helped curb inflows of substandard and non-prime
steel, which often lacks adequate corrosion resistance for India's varied
climatic conditions. Anti-dumping and safeguard duties have provided some
relief, but pricing dynamics remain distorted because of enforcement gaps and
continued circumvention. This forces technologically advanced domestic producers
to compete primarily on price rather than performance, undermining long-term
infrastructure outcomes. As long as tenders are awarded solely to the lowest
bidder, lower-grade imports are likely to continue capturing market share
regardless of lifecycle performance, he said. Supply security and export
pressures Securing ferro-chrome supply is another priority for the sector,
Krishnamurti said. Global volatility in energy and logistics has exposed the
risks of external dependence for this key alloying element. Krishnamurti
proposed a three-pillar strategy: prioritising domestic value addition through
local conversion of chromite reserves, integrating renewable captive power to
stabilise production costs, and building strategic reserves supported by
stronger internal logistics to safeguard infrastructure projects against global
supply disruptions. External trade barriers are also reshaping export prospects,
he said. The EU's decision to reduce duty-free quotas by nearly 47pc and impose
tariffs of about 50pc beyond those limits has made the region commercially
unviable for large parts of the year. The bloc's Carbon Border Adjustment
Mechanism (CBAM) further raises the landed cost of Indian stainless steel, even
for efficient producers. These developments increase pressure on India to
accelerate the shift toward lower-carbon production, Krishnamurti said. At the
same time, India's expanding domestic infrastructure pipeline could absorb some
export volumes, while emerging markets in the Middle East, southeast Asia and
Africa offer growth opportunities with fewer trade barriers. The sector needs
greater adoption of scrap-based and renewable-powered production, a dedicated
national stainless steel policy and wider use of LCCA in procurement frameworks
to support demand for higher-quality material, Krishnamurti said. By Deepika
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