India’s steel imports expected to increase

The demand-supply scenario for steel in India during the previous fiscal year indicates that steel imports are expected to grow in the coming months. While steel consumption grew by 7.5% YoY in 2018-19 to 97.54 million MT, production rose by only 3.7% YoY to 131.57 million MT during the same period.

Imports for the year grew by 4.7% YoY to 7.83 million MT, while exports dropped by 33.9% to 6.36 million MT. Under this scenario, India became a net importer of steel after two years as a net exporter. South Korea accounted for 37% of India’s steel imports, exporting 2.94 million tonnes in 2018-19. Around 86.6% of the imports were accounted by flat steel products such as hot-rolled and cold-rolled coil and steel plate.

Due to high tariffs and protectionist measures by the US and EU, steelmakers in China, Japan, South Korea and Indonesia also ate away India’s share in markets like Middle East and Africa, while also increasing their supply to the Indian market. Imports of stainless steel flat products from Indonesia to India increased from 1,000 tonnes a month in 2017-18 to 10,000 tonnes a month during the previous fiscal.

According to the Indian Steel Association, domestic consumption will decelerate in the current fiscal due to the slowdown in automotive and consumer products. However, it is likely to stay above the 7% mark, with a projected growth of 7.2% in 2019-20 and 2010-21. 

India’s steel ministry expressed concerns in April that the rising consumption could expose the Indian market to cheap imports.