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India's market share is impacted by lower exports and rising steel production in China, but local demand is encouraging for the nation's steel producers. India's steel exports in May 2024 totalled 0.5 million tonnes (MT), the lowest in the previous six months. It was 0.66 metric tonnes in April 2024.
Indian exports have recently been impacted by several factors, including poor production due to scheduled maintenance shutdowns, a preference for the home market over exports, limited export quotas from the EU, a slowdown in global steel demand, and competitive prices from China.
The country's completed steel consumption increased 10.5% to 23 MT in April-May 2024, a six-year high, demonstrating positive optimism among steelmakers regarding India's domestic demand.
The extension of the EU Safeguard Measure on steel, notably European hot-rolled coil, by two years to June 30, 2026, and the availability of more significant amounts of steel from China for exports are projected to put pressure on Indian exports in the coming months. However, Anil Kumar Chaudhary, Chair of the Minerals and Metals Committee of the PHD Chamber of Commerce and Industry, believes that strong domestic consumption will more than balance export market losses.
Domestic finished steel consumption increased 13% to 136 MT in 2023-24, according to SteelMint. The automotive and infrastructure sectors make up the majority of steel demand. Steel usage totalled approximately 120 MT in the previous fiscal year 2022-23. The government is also optimistic about the country's growing demand for steel. Steel Secretary Nagendra Nath Sinha predicted that demand would increase by about 10% last month.
Sanjay Gupta, Chairman and Managing Director of APL Apollo Tubes Limited, said the domestic demand for steel in India is significant and growing, driven by robust construction, infrastructure projects, and the automotive sector. "With the Indian government's focus on infrastructure development and the 'Make in India' initiative, there is potential for increased domestic steel consumption. The industry can capitalize on these opportunities by investing in capacity expansion, adopting advanced technologies, and enhancing operational efficiencies," he added.
According to steel market watchers, companies are getting up to 15% margins, which signifies the domestic market's potential. According to a CRISIL report, India became a net importer of steel in fiscal 2024, with an overall steel trade deficit of 1.1 million tonnes (MT). The government's thrust on expansion of infrastructure in urban and rural areas and schemes such as PM Gati Shakti and Make in India have contributed to increased demand for steel.
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