CashNews.co
India’s primary steel manufacturers including Tata Steel, JSW, AM/NS and state-run SAIL may get a reprieve from the prospect of “unsustainable prices’ wiping off their margins, in the form of higher import tariffs on their key products like hot rolled coil (HRC).
Union Steel Minister H D Kumaraswamy said on Wednesday “he will try to convince the finance ministry to raise duties on steel imports to 10-12% from the current 7.5%.” The minister also expressed concerns on the manner in which China was dumping steel into India, while speaking at the Fifth Steel Conclave organised by the Indian Steel Association here.
Domestic teel prices have fallen to their lowest levels in over three years, largely due to shifts in the global markets. Data compiled by rating agency ICRA show that at Rs 51,200 a tonne, the August (ex-works) price of the benchmark HRC in the Mumbai market was at its lowest since November 2020, when it was Rs 45,975 a tonne.
TV Narendran, CEO and MD, Tata Steel recently said that these prices “aren’t sustainable,” adding that the company expected the trend to reverse in the next few weeks. Similarly, in a results call with the analysts, JSW Steel Joint Managing Director and CEO Jayant Acharya said, “The Indian steel imports in Q1 were up by 27% YoY, while it were lower QoQ. But elevated exports from China continue to be a concern. The Chinese production continues to remain higher. Domestic demand is still softer and therefore the excess is flowing out to the world.”
Kumaraswamy also stressed on the need to remain vigilant against challenges such as the global demand slowdown, especially from the ramifications of a demand meltdown in China.
The steel ministry, he said, is committed to ensuring that the journey towards Aatmanirbhar Bharat in steel remains undeterred. “We have seen demand grow at double-digit rates over the last three years, and this year is no exception. At the Ministry of Steel, we are confident in the growth story of Indian steel. However, I understand the challenges that lie ahead,” he said.
The minister further said that by investing in the latest technologies and optimising the processes, the carbon footprint can be reduced significantly.
“Hydrogen holds immense potential as a clean fuel for steel production. While there are challenges to overcome, we must invest in research and development to accelerate its commercialisation,” the minister added.
According to steel ministry data, China contributed 30.5% of India’s total imports during the April-June period of the current year, compared with 28.4% a year ago. Japan’s share rose to 26.9%, compared to 12.7%, while Korea’s share fell to 27.5% from 35.5% a year ago. India remained a net importer during the April-June period of the current fiscal year, following the trend that started in August of FY23, barring aberrations in February and March of FY23.
In FY24, India’s finished steel consumption grew by 13.4% over FY23 to stand at 136 MT. However, finished steel production grew by 12.4% to 139 MT.
India was a net exporter of steel for an extended period. However, the trend took a U-turn, and India became a net importer of steel last fiscal year when its imports exceeded its exports by 0.83 million tonnes.