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Global steel prices, including those in India, will continue to be influenced by Chinese production (including cuts) and exports. Steel consumption in India is predicted to rise by at least 8-10% in FY25, outpacing GDP growth.
India's status as a net importer of steel appears to be a transient phenomenon, and "it would be a pity" if it continues in the long term. However, the Indian consumer narrative remains robust. Consumption is primarily infrastructure-led, according to TV Narendran, Managing Director, Tata Steel.
Narendran pointed out, steel coming into the country (as imports) is “commodity grade”; and not speciality or high quality. “Some 95% of the steel coming in can be made in India,” he said, adding as long as it is unfair imports, the government needs to deal with it.
India was a net importer by less than 1 MT for FY24. Imports were 8.3 MT, against exports of 7.5 MT. “For one or two months, here and there, it is okay (to be a net importer). But I think in the long run, it would be a pity if India were to remain a net importer of steel given all the iron ore we have and the production capacities that are coming up,” he said.
India’s steel consumption in FY24 was 136 MT, up 14% year over year, against a global demand growth of less than 2%. Production of finished steel was up 12.4% to 138.5 MT. The production cuts expected in China during the year could help stabilise prices globally and in India.
China, the world’s biggest producer and exporter of steel, is witnessing a protracted real estate crisis that has yet to bottom out. Infrastructure demand growth is slowing, and 12 debtor regions have been ordered to halt projects. This is expected to see a 2% odd demand decline there.
The country exported 10 MT of steel in March 2024, up by 2.8 MT month over month. Total steel exports in January - March were 25.8 MT, up 30.7% year over year. In comparison, Indian steel exports for March were 0.8 MT, down 19% month over month. Total exports for Q4FY24 were 2.72 MT, up 35% year over year.
On the other hand, Chinese export prices (for steel coming into India) were $559/t (benchmark HRC) for early-April deliveries, as against $609 per tonne in January, indicating the continued price pressure on Indian offerings. India’s domestic steel prices crept up to $640.80/t in April, from $630/t levels a month ago. However, prices are yet to reach January highs of $646.84/t.
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