KEY NUMBERS
- 319 MTPA — New coal-based blast furnace capacity announced or under construction globally
- 5% — Year-on-year increase in global blast furnace capacity under development
- 80 MTPA — Existing blast furnace capacity planned for relining
- 141 MTPA — Operating blast furnace capacity currently planned for retirement
- 88 MTPA — Expected net growth in global blast furnace capacity by 2035
- 34% — Current share of global steelmaking capacity using Electric Arc Furnaces (EAF)
- 42% — India's share of global steelmaking capacity under development
- 357 MTPA — Total steelmaking capacity under development in India
- 112 MTPA — Steelmaking capacity under development in China
- 60%+ — Share of global coal-based blast furnace capacity being added in India
- 93% — Share of India's new ironmaking capacity dependent on coal-based technology
- 11% — Steel sector's contribution to global CO₂ emissions
MARKET ANALYSIS
For the last few years, conversations around the steel industry have increasingly focused on green steel, carbon reduction, and cleaner technologies. Governments, policymakers, and large companies across the world have repeatedly spoken about reducing emissions and moving away from coal-based production methods. Many industries have announced sustainability targets, while steel producers have also committed to lowering their carbon footprint over the coming decades. On paper, the industry appears to be moving rapidly toward a cleaner future.
However, the latest global data suggests that reality may be moving in a different direction. A recently released industry study highlights that while conversations around decarbonisation continue to become stronger, actual investments on the ground are still heavily favoring traditional coal-based steelmaking routes. The gap between long-term climate ambitions and present-day business decisions is becoming increasingly visible. What the industry says and what the industry is building are not moving at the same speed.
According to the report, approximately 319 million tonnes per annum of new coal-based blast furnace capacity has either been announced or is already under construction globally. In addition to this, around 80 MTPA of existing capacity is expected to undergo relining activities. Relining may sound like a technical maintenance exercise, but in reality it is a major investment decision because it extends the operating life of blast furnaces by many years. When these numbers are compared against only 141 MTPA of planned retirements, the broader trend becomes difficult to ignore.
The numbers indicate that global blast furnace capacity is expected to increase by a net 88 MTPA by 2035. This means that instead of reducing dependence on coal-based production routes, the steel industry is still expected to add more capacity than it removes. The situation becomes more interesting because this trend is emerging at a time when carbon regulations are becoming stricter across several regions. Markets such as Europe are already moving toward policies that place greater emphasis on cleaner production and lower emissions.
India has emerged as one of the most important stories within this larger trend. The country currently accounts for around 42% of total steelmaking capacity under development globally, equivalent to approximately 357 MTPA. This figure is significantly higher than China's pipeline of around 112 MTPA. More importantly, over 60% of all new coal-based blast furnace capacity being added globally is located in India.
The reason behind this trend is relatively straightforward. India continues to witness strong infrastructure development, manufacturing expansion, urbanisation, and rising industrial activity. Demand for steel across sectors such as construction, automobiles, railways, and energy continues to increase steadily. As a result, steel producers remain focused on expanding capacity to meet expected long-term domestic demand growth.
However, another important observation emerges from the report. Around 93% of India's planned ironmaking capacity still relies on coal-based technology. This suggests that while demand growth remains strong, cleaner technologies have not yet become the preferred route for a large part of future expansion plans. Cost economics, technology readiness, and availability of raw materials continue influencing these investment decisions.
China also remains an important part of this discussion. While much of the global narrative has shifted toward India's growth story, China still operates an enormous steel base and continues maintaining significant blast furnace capacity. A large percentage of its existing facilities currently have no retirement plans. As a result, both India and China will play a major role in determining the future direction of global steelmaking.
Another interesting aspect is the pace of Electric Arc Furnace adoption globally. Electric Arc Furnace technology currently represents around 34% of global steelmaking capacity, showing only limited growth compared with previous years. Although the transition toward cleaner technologies continues, the speed of that transition appears slower than what many industry participants had expected. This indicates that traditional steelmaking methods may continue remaining important for much longer than initially anticipated.
INDUSTRY IMPACT
The implications of these developments for the ferro alloy industry could be significant over the coming years. Blast furnace-based steelmaking remains one of the largest consumers of ferro alloys because products such as ferrochrome, ferromanganese, and ferrosilicon are critical inputs in steel production. Any increase in blast furnace capacity automatically creates additional long-term demand for these products. The relationship between steel output and alloy consumption remains closely connected.
The Indian market becomes particularly important within this discussion because a large share of future steel capacity additions is concentrated within the country. If India continues expanding steelmaking infrastructure at the current pace, demand for ferro alloy inputs is expected to increase alongside it. This creates stronger long-term visibility for domestic alloy manufacturers and suppliers. Unlike short-term market cycles, capacity expansion often creates demand support over several years.
The relining activity also deserves attention because it creates another layer of demand visibility. When a blast furnace undergoes relining, producers are effectively extending its operating life rather than replacing it with alternative technology. This means continued consumption of raw materials and alloy inputs for many additional years. Such investments often reflect confidence in the long-term viability of existing production routes.
MARKET OUTLOOK
The current situation presents two different realities for the steel industry. On one side, there is growing pressure to adopt cleaner technologies and reduce emissions. On the other side, there are strong economic and demand-driven reasons that continue supporting investments in traditional steelmaking methods. The industry is therefore moving through a period where long-term sustainability goals and present-day commercial realities are operating simultaneously.
For India, this moment carries even greater significance because the country now appears to be moving toward the center of the global steel growth story. The decisions taken by steel producers, investors, and policymakers over the next few years could influence not only domestic industry growth but also the broader direction of global steelmaking. While conversations around green steel will continue becoming stronger, current investment trends suggest that coal-based steelmaking may remain a significant part of the industry for many years ahead.