India Likely To Remain Net Importer Of Steel In FY25, Says ICRA Research
Here's all you want to know about India's steel imports and exports.
India is likely to remain a net importer of steel in the current fiscal despite being the world's second-largest steel producer, according to ICRA Research. In fiscal 2024, the country became a net importer of steel, a situation that had previously occurred in fiscal 2016.
Two main factors have led to this scenario: One is a weak global market that will impact India's export potential. Second, cheaper steel from China and Japan prompting higher imports.
Steel Pricing
One of the key reasons why India saw a influx of steel imports was on the back of domestic steel prices trading at a premium over the landed prices from China and Japan.
While the premium stood between $10-11 per million tonne in the last week of May 2024, further drop in steel prices has expanded the domestic premium more to $21-32 per million tonne.
Indian Steel Export And Imports
India is currently a net importer of finished steel in fiscal 2025, according to the Ministry of Steel. Between April and July 2024, India's finished steel imports were 2.695 million tonne, compared to 1.573 million tonne exports. This implies a trade deficit of 0.11 million tonne so far in fiscal 2025.
India's steel trade deficit stood at 1.1 million metric tonne in the full year ended March 2024 compared to a trade surplus of 1.6 million metric tonne seen in fiscal 2023.
This was because of high imports from China in fiscal 2024. The poor housing sector in China led to a weak consumption of steel, forcing Chinese steel firms to redirect their products outside their borders to boost volume growth.
Modest Export Potential
Barring India and Europe, leading steel producing hubs are expected to witness anemic steel demand in 2024, according to ICRA Research. This not only impacted global steel prices but also kept India's competition with Chinese steel producers elevated in India’s key export destinations like Europe, West Asia, and Southeast Asia.
India's finished steel exports could only see a modest increase of 7-8% so far in fiscal 2025, according to the rating agency.
