'Yuan depreciation may lead to more steel imports from China'

Depreciation in the Chinese currency is likely to result in more steel imports, further impacting the domestic steel producers, Tata Steel said today.
"Indian government raised import duty on some products by 2.5 per cent, but the correction in global steel prices has offset any benefit to the local steel players. And now as the Chinese currency devaluation has happened, import pressure could worsen in the future," Tata Steel Group Executive Director (Finance and Corporate) Koushik Chatterjee said at an analyst call.
Faced with exports shrinking 8.3 per cent in dollar terms in July this year, China devalued yuan by record 1.9 per cent to 6.23 per dollar, its lowest point in almost three years.

China is the world's largest exporter and has a 13.7 per cent share in global exports and close to one and half times United States' exports last year.
Sharing similar fears, Tata Steel Managing Director (India and South East Asia) TV Narendra said: "Depreciation of the Chinese Yuan, that is obviously some expectation that the Chinese will be a bit more aggressive in exports."
Domestic steel manufacturers has been facing a growing onslaught from cheap steel imports from China, Japan and Korea.

Tata Steel, while presenting its June quarter results said: "Imports are now at approximately 1 million tonnes per month. While steel consumption grew by about 7 per cent year-on-year the incremental demand was captured by imports and as a result the consumption of domestically produced steel increased by less than 0.5 per cent."

The steel maker today reported an over twofold jump in consolidated net profit to Rs 763 crore in the June quarter of 2015-16 helped by strong sales from its Indian operation, cost optimisation and sale of non-core assets.
The Mumbai-based steel giant had posted a net profit of Rs 337.33 crore in the corresponding quarter of last fiscal.
Its consolidated total income, however, fell 17 per cent to Rs 30,300.33 crore during the June quarter, from Rs 36,427.21 crore in the same period a year ago.