India's steel trade deficit grows to ₹8,888 crore, highest in recent years

India was a net importer for the first nine months of the fiscal year, causing its steel trade imbalance to grow to ₹8,888 crore, one of the largest in recent memory. In just one month, the deficit increased by ₹6,495 crore, or 272% sequentially.

Import of finished steel for Apr–Dec stood at 5.6 million tonnes (mt)–up 26.4% y-o-y, exceeded exports at 4.7 mt – down 1.4% YoY, by 0.9 mt, as per a report of the Steel Ministry, accessed by a media source.  

In terms of value, imports stood at ₹48,027 crore whereas exports stood at ₹39,139 crore. 

Trade deficit for April–Nov was ₹2,393 crore and India was a net importer by 0.3 mt.

“....For April-December 2023, domestic finished steel production stood at 102.196 mt (up by 14.1%) and domestic consumption was at 99.991 mt (up by 14.8%). India was a net importer of total finished steel with imports outpacing exports,” the report said. 

Volume-wise, hot rolled coils and strips (2.272 mt) were the item most imported (41% share in total finished steel).

Ministry report shows, Korea was back as the top importer of finished steel with 1.77 mt of shipment coming in, an increase of five% over last year. Hot rolled coils and strips, cold rolled strips and galvanised plates and coils were amongst the highest shipped items. 

China, however, slid down to number two, with 1.75 mt of shipments coming-in, up by 62% y-o-y. Shipments coming in were 1.08 mt in the year-ago-period. Galvanised plates, coils and sheets, pipes and (steel) plates were amongst the max shipped items. 

Imports from Japan increased 38% to 0.8 mt while Vietnam saw a 486% increase to 0.5 mt, for the period under review. 

According to TV Narendran, CEO and MD, Tata Steel, production ramp-ups had happened (in China) and “all of that found its way to the export markets” since the domestic market there did not recover on expected lines. 

“The Chinese steel industry is not really making money. Their profitability is not great. And hence you’ve also seen Chinese steel prices go up about $30 during December. So either prices have to start moving up or they have to start cutting production at some point in time. We expect a better balance on Chinese production versus demand this year than we saw last year,” he said during an earnings call. 

The Ministry report also adds that three European nations – Italy, Spain and Belgium – were amongst the top three export markets, apart from Nepal and UAE. 

Exports to Italy – the largest for the first nine months of the fiscal – was 0.93 mt, up 53% y-o-y; whereas in case of Belgium, shipments rose by 29% to 0.49 mt. Orders to Spain rose 75% y-o-y to 0.4 mt. 

France and Germany are two other European markets, but continued to be much smaller (reporting shipments of 24,000 tonnes each) in comparison to the other three nations. 

Nepal was the second largest export market for Indian mills at 0.5 mt, up 31%. 

Incidentally, the UAE market continued to remain under stress witnessing a 36% drop y-o-y to 0.38 mt. 

“Volume-wise, hot rolled coil and strip (1.634 mt) was the most exported item (accounting for) 35% share in total finished steel,” the Ministry report says.