India’s metals and mining sector is experiencing challenges in the second quarter of the fiscal year, with steelmakers anticipating a significant squeeze on profit margins. The pressure is primarily due to rising input costs, including raw materials and energy, combined with fluctuating global steel prices that are impacting revenue stability.
Industry observers highlight that the cost of key inputs such as coking coal, iron ore, and alloying materials has surged, increasing production expenses for steelmakers. Despite steady domestic demand driven by infrastructure and construction projects, companies are facing difficulties in maintaining profitability. Steel producers are implementing measures to optimise operations, enhance supply chain efficiency, and manage overheads in order to mitigate the financial impact.
In contrast, non-ferrous metal companies are benefiting from global price increases in commodities such as aluminium, copper, and nickel. Improved earnings in this segment underline the divergent performance of ferrous and non-ferrous sectors within India’s metals and mining industry. Analysts note that the trends emphasise the sensitivity of steelmakers to both domestic and international market fluctuations.
Experts suggest that while margin pressures may persist in the short term, long-term growth opportunities remain robust. Expanding industrial applications, urban development, and infrastructure projects continue to support domestic steel demand. Companies investing in technology upgrades, energy-efficient production methods, and strategic procurement are expected to alleviate some of the current cost pressures.
Financial planning and risk management are also critical as steelmakers navigate volatile global markets. Strategies such as hedging, long-term supply agreements, and operational efficiencies are being explored to stabilise costs. By adapting to these challenges, the sector is expected to sustain steady growth while supporting India’s broader industrial expansion.
