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China's property market collapse has left its steelmakers with an oversupply that they are offloading around the world, including India. China emerged as the leading seller to Indian traders in FY24, capitalising on lower-priced metal products. The amount of finished produce received was about 2.7 million tonnes (MT), the most in eight years. China supplied one out of every three imports into the country during the previous fiscal year.
According to a Steel Ministry report, China's steel imports into India increased by a staggering 91% year-over-year, dislodging two other Asian giants in the process. Korea and Japan had a 16% year-over-year increase in shipments, reaching 2.6 MT and 1.3 MT, respectively. Imports from China are crawling back to FY17 levels (2.2 MT) after declining to 0.8 MT in FY22.
Ministry data shows that the sharp rise in Chinese steel exports echoes a similar situation in FY15 and FY16, when imports stood at 3.6 MT and 4.2 MT, respectively. The surge then was also powered by a collapse in steel demand driven by the Chinese real estate market and lower capacities across struggling steel mills in India, which at that point were trying to reduce leverage on their balance sheets.
“Indian steel demand has been good and grew at close to 13-14% last fiscal. However, the worrying factor continued to be Chinese imports. Approximately 10 MT has been exported out of there over the last few months. And these are not high-grade or speciality steel. These are trade-level offerings that are competing with Indian domestic players purely on price,” an industry executive explained.
Chinese steel exports rose 33% in the past year. In the 12 months through February, China exported 95 MT of steel, according to Customs data. In FY24, Indian steel imports surged 38% y-o-y to 8.4 MT, with the country turning net importer. Exports were at 7.5 mt, according to the latest report from the Ministry.
Imports of finished steel were valued at ₹68,193 crore, while the trade deficit was ₹9,036 crore. (0.9 MT). Volume-wise, hot-rolled coil/strips, at 3.7 MT, were the most imported item, accounting for 44% of the total finished steel shipments.
Korea shipped the highest amount of HR coils and strips, 0.7 MT, just 10% higher than China’s 0.64 MT of imports. Against this, Chinese imports of stainless steel were the highest, at nearly 1 MT, at least 50% higher than those of Korea. Pipes and plates were the two other large import categories from China.
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