India’s exports of steel rose 11% sequentially to 0.44 million tonnes in October compared with 0.4 million tonnes in September. It marks the first sequential rise this fiscal year. Meanwhile, imports of steel into India too fell 4% from September, at 0.98 mt, for the first time moderating so far this year. The declines were largely due to government import regulations with tougher quality controls and a curb on non-BIS products.
Steel imports from year-to-year were maintained at high levels, up 34% in reflection of persistent pressure on the domestic market. Meanwhile, exports have strengthened significantly, with 51% gains from October 2023 when exports were at 0.29 mt. To be sure, exports growth is welcome news. But it does little to ease the severe margin pressures that Indian steel manufacturers continue to bear.
India has continued to be a net importer of steel for the April-October period of FY 2024. The country imported 5.72 mt of steel, up 40% year on year, against exports of just 2.75 mt. This underlines the continued importance of imported steel and curbs on imports are only gradually bringing it back in check.
This decline in imports can be attributed to the stricter regulatory apparatus of India and the recent rebound of world steel prices, especially following China’s stimulus package. Exports were very strong to markets in the Middle East and Europe, where Indian steel is now more competitively priced relative to Chinese products.
Indian steel mills still face severe competition from competitors and pressure on margins, even though there is likely to be some improvement over the next few months with seasonal demand and upward momentum in domestic and export market prices. Tata Steel and JSW Steel are rationalizing their strategy, because Tata Steel has already declared its decision to cut back exports at unprofitable prices. Steel Sector is hoping for stabilizing global steel prices and emerging treads of improving demand in India.
