Imports of steel products from China surged during the first quarter of this financial year, even as South Korea remained the highest steel exporter to India despite a year-on-year decline in shipments.
“A sharp rise in the imports of finished steel was recorded in the first
quarter of the current financial year. The surge in imports, driven by
countries with Free Trade Agreements (FTAs), as well as China, is eating into
domestic demand,” Ranjan Dhar,
chief marketing officer, ArcelorMittal Nippon Steel,
told ET.
Imports of steel products into the country in the April-June period stood at
2.23 million tonnes, 31% more than 1.70 mt a year ago. Imports of metal
products, including finished steel, scrap and ferro alloys,
surged during this period.
According to official data, imports of steel from South Korea fell to around
713,000 tonnes in the first quarter of this fiscal from about 686,000 tonnes a
year ago. However, Chinese steel exports to India surged to about 570,000
tonnes from around 352,000 tonnes a year ago.
“The current challenge goes beyond a simple supply-demand shift. It involves
the issue of predatory pricing - a practice that is severely harming this key
sector,” said Dhar.
According to steel traders, there has been a sequential drop of Rs 5,000-6,000
per tonne in hot-rolled coil prices from earlier this year. Since hot-rolled
coil is used as an input for most steel products, its price is used as an
industry reference.
“Domestic steel prices had climbed up to Rs 65,000 per tonne in the first
quarter of the previous fiscal. These have now come down to Rs 56,000 per
tonne. But despite the fall, imported steel from Vietnam, Japan, China and
Russia is trading at Rs 54,000 per tonne, and is expected to come down further
next month,” said Vedant Goel, managing director at Neo Mega Steel, a trading
company.