Steel imports surge 16% in FY18

Exports likely to fall with rupee depreciation

After a year’s respite, steel imports increased 15.9 per cent to 3.4 million tonnes (mt) during April-August as compared to the corresponding period last year, said the Joint Plant Committee (JPC).

The rise was sharper in August. Overall imports in the month were up 20 per cent over July and 62 per cent over August 2016. In fact, India was a net importer of total finished steel in August but maintained its net exporter status during April-August, according to the JPC. 

Exports in August stood at 0.9 mt.

Steel companies are apprehensive of a repeat of a surge in imports witnessed in 2015-16. They were at 10.2 mt, an increase of 20 per cent over the previous year.

“The increase in imports is a cause for concern. There are several products coming, such as colour-coated steel. In India, there are ample capacities available, we need to study these,” said JSW Steel Director (commercial & marketing) Jayant Acharya.

The deluge of cheap imports from China and other countries in 2015-16 was detrimental for the industry. It prompted the government to bring in trade measures such as the safeguard duty, minimum import price and anti-dumping duty. But the efforts to protect the industry started only towards the end of 2016.

The government had imposed anti-dumping duties of $478 and $489 a tonne on hot rolled alloy and non-alloy coils (HRC) and $561 a tonne on hot rolled steel plates from China, Japan, Russia, Indonesia, Brazil and South Korea. However, the reference price is not applicable anymore as the price level has been breached. 

Chinese hot rolled coil export prices have increased by about 40 per cent since mid-May this year, reaching $588 a tonne in the third week of September, supported by China’s resilient domestic demand and its supply-side reforms to check the domestic steel overcapacity, said Jayanta Roy, senior vice-president and group head (corporate sector ratings), Icra. 

Led by international prices, cost push and domestic demand, domestic prices, too, are now hovering at Rs 40,000 a tonne.

The industry expects exports to come down in the coming months. Though the current figures don’t reflect it, during April-August, export of total finished steel was up 57.1 per cent in April-August 2017 (3.7 mt) over the same period, a year ago.

Last year, even with a muted growth in consumption at three per cent, the industry had sailed through on the back of a stellar export performance. In 2016-17, exports were up 102 per cent to 8.2 mt, while imports fell 36.6 per cent to 7.4 mt. 

“The export numbers in October may reflect the impact of rupee,” a producer said. The growth in crude steel production is also lower than previous year though producers feel it could be temporary and some attribute it to uncertainty over inventory because of the goods and services tax. In 2016-17, crude steel production grew 8.5 per cent, while during April-August, the growth was 3.5 per cent.