India's trade imbalance in steel climbs as Chinese imports spike, exports drop

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India's trade imbalance in steel climbs as Chinese imports spike, exports drop

Ferrous 27 Jun 2024 11:12 AM IST The Hindu BusinessLine

India's steel trade deficit has increased to ₹4,284 crore in the first two months (April and May), accounting for 47% of the ₹9,036 crore recorded in FY24. The country is still a net importer of steel, with increased shipments from China. A Steel Ministry report states that imports totalled ₹11,831 crores in April and May, while exports were ₹7,547 crores.

In terms of volume, imports were 1.3 million tonnes (MT) (up 37% y-o-y), while exports were 0.94 MT (down 40% y-o-y) over these two months. “Flat products accounted for 95% share of imports, up 42%, while non-flat imports were down 8.9%. On the other hand, flat product exports (87% of the export basket) were down over 42%, while non-flat exports were down 11%,” the Ministry report said.

According to a market source, exports remain under pressure. Chinese “dumping” and re-routing of their offerings through other countries into India continues, even as FTA renegotiations are underway with some of these countries. While this has impacted domestic prices, export offers continue to be affected in critical West Asian markets,” the market participant said.

China remains India's largest metal seller, displacing traditional markets such as Japan and Korea. Chinese shipments in these two months have risen 79% year over year to 0.41 MT, valued at $482 million, a 62% rise. Sources said Chinese shipments were at elevated levels even in 2023. Nearly 43% of the shipments from China are of alloy and stainless steel, at 0.174 MT, while the remaining 0.233 MT consists of steel plates, bars, rods, galvanised corrugated sheets, and galvanised pipes, among other things. Due to over-capacity, the Chinese steel sector has been putting pressure on Indian exports by focusing more on competitively priced steel globally.

Data released by consultancy firm BigMint reveals that India is among the top five countries where Chinese shipments (exports from the nation) have increased. Between January and May, 1.10 MT of steel shipments were received, up 51% year over year. In the year-ago period, metal shipments were around 0.73 MT.

Other countries where Chinese shipments have increased are Vietnam (5.51 MT, up 89% year over year), Brazil (1.45 MT, up 60% year over year), and the UAE (2.18 MT, up 53%) for the January–May period of this year.

For Indian steel-makers, Europe remains a dominant market, though it is depressed because of global economic headwinds. Two of the key buyer-makers, Italy and Spain, saw shipments decline 49% y-o-y to 0.22 MT and 60% to 0.051 MT, respectively. The UK saw exports increase 25% to 0.13 MT, whereas shipments to Belgium were near flat at 0.13 MT. Shipments to the UAE, where India faces stiff price competition from Chinese players, declined 46% to 0.05 MT.

Also Read : Indian steelmakers demand measures to address growing steel imports India's steel manufacturing might face hurdles in its raw material supply

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India's trade imbalance in steel climbs as Chinese imports spike, exports drop

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