India Used 7.5% More Steel in April to September 2026, but Production Grew Only 2.9%. What the Gap Means for Scrap

India's steel sector, April to September 2026

(Source: Ministry of Steel data, released 6 October 2026.)

Demand is growing more than twice as fast as output

Steel consumption in India grew 7.5% in the first half of 2026-27, while crude steel production grew 2.9% and finished steel production 3.7%. In September alone, consumption rose about 8% to 14.4 million tonnes, while crude steel output rose 3.4% to 14.1 million tonnes.

Recykal Times analysis: India consumed about 3.1 million tonnes more finished steel than it produced in these six months. Net imports, imports minus exports, covered only about 0.6 million tonnes of that. The rest would have come from stocks held by mills and traders. (Our estimate: 84.9 minus 81.8 million tonnes; 4.14 minus 3.55 million tonnes. The ministry does not publish a stock figure, so this split is approximate.)

When demand outruns production and stocks are drawn down, mills have reason to run harder. That means buying more raw material, including scrap.

Where scrap fits in

India makes steel in two broad ways. Blast furnaces turn iron ore into hot metal, which is then made into steel. Electric arc and induction furnaces melt scrap and sponge iron. Some scrap is also used in blast furnace plants.

Recykal Times analysis: Hot metal output grew 2.5%, slower than crude steel at 2.9%. Crude steel made beyond hot metal, a rough measure of the scrap and sponge iron routes, rose from about 35.5 million tonnes to 36.8 million tonnes, up about 3.7%. That suggests furnaces that rely on scrap and sponge iron grew slightly faster than the blast furnace side in the first half. (Our estimate: 82.7 minus 47.2, and 85.1 minus 48.3 million tonnes. Hot metal and crude steel routes do not match one to one, so treat this only as a direction.)

This matches the scrap market. On 5 October 2026, Mandi Gobindgarh's heavy melting scrap price reached ₹39,700 a tonne, ₹1,300 higher than a week before, with power cuts in Chhattisgarh also tightening supply.

Imports set the ceiling

Finished steel imports rose 23.8% to 4.14 million tonnes in April to September 2026, and their value rose about 40% to ₹43,690 crore. Exports also grew, by 26.2% to 3.55 million tonnes, but India still imported about 0.6 million tonnes more than it exported.

Recykal Times analysis: On average, India paid about ₹1.05 lakh a tonne for imported finished steel and earned about ₹79,700 a tonne on exports. The gap suggests India is importing more specialised, higher-value grades while exporting more common ones. Imports matter for scrap because every tonne of imported steel is a tonne that Indian mills did not have to make. Strong import growth limits how far domestic steel prices, and so scrap prices, can rise. (Our estimate: ₹43,690 crore divided by 4.14 million tonnes, and ₹28,264 crore divided by 3.55 million tonnes. Averages depend on the product mix.)

In September, import growth slowed sharply to 0.4% by volume, at 6.5 lakh tonnes, while exports fell 3.8%. One month is too short to call a trend, but a slowdown in imports would give domestic mills, and their scrap suppliers, more room.

Capacity is not the constraint

India's crude steel capacity is 222.9 million tonnes a year, and the National Steel Policy aims for 300 million tonnes by 2030.

Recykal Times analysis: At the first-half pace of 85.1 million tonnes, India would produce about 170 million tonnes in a full year, which is about 76% of capacity. There is room to make more steel at home. As more of that growth comes through electric furnaces, demand for domestic scrap will rise with it. (Our estimate: 85.1 × 2 = 170.2 million tonnes, divided by 222.9 million tonnes.)

What this means for you

Kabadiwalas and scrap collectors: Steel demand is strong, and mills are buying. Steady collection of heavy scrap should find buyers through October, though prices can swing week to week.

Traders and aggregators: Consumption growth of 7.5% is a solid base for demand. Watch monthly import numbers. A fresh rise in imports is the main risk to scrap prices.

Induction furnace and mill owners: Demand is running ahead of production, and stocks appear to have been drawn down. That supports selling prices for now, but check that ingot and billet prices keep pace with scrap.

Recyclers and companies planning scrap capacity: With mills using about three-quarters of capacity and a 300 million tonne target, long-term scrap demand looks firm. Supply, not demand, is the bigger question, especially with Europe moving to restrict scrap exports from May 2027.

What to watch

1. October steel data: whether consumption growth holds near 8%.
2. Monthly import numbers: whether September's slowdown continues.
3. 8 October 2026: The GST Council meets, with input credit and registration rules on the reported agenda.
4. Chhattisgarh power supply: whether cuts continue to affect sponge iron and billet output.
5. 16 October 2026: Last date to send the EU feedback on its proposed scrap export curbs.

The bottom line

India's steel demand grew far faster than its output in the first half of 2026-27, and that gap supports scrap demand. Imports are the limit. As long as consumption keeps growing near 8% and imports slow, domestic scrap sellers are in a good position.