India’s Steel Imports To Increase To 6MT In FY24 Due To High Demand: Crisil

India imported 4.26 MT of finished steel from April to November 2023 and the import may reach 6 MT in the current fiscal year due to high domestic demand, according to a Crisil analysis.

The research comes at a time when steel producers are concerned about rising imports.

Global steel demand, which has been muted since the outbreak of the Russia-Ukraine conflict, is predicted to climb 1.6 per cent in 2023, following a 3.3 per cent drop in 2022, according to the global analytics firm.

According to Crisil, the slow rate of growth is partly due to a buoyant 13 per cent increase in demand in India, which has defied the trend thus far.

This fiscal, India's steel sector is expected to rise by 11-13 per cent, following years of growth of 11.4 per cent and 13.4 per cent in fiscals 2022 and 2023, respectively.

“Strong domestic demand, supported by government spending on infrastructure, building and construction segments, is expected to keep India's steel imports elevated around the 6 MT (million tonnes) mark this fiscal even as the global steel industry battles a slowdown,” Crisil said in a statement.

Chinese mills have begun to push volumes into the global market at extremely low prices. Between January and November of this year, China's exports surged 35.6 per cent to 82.7 MT, the highest level since 2016.

Chinese exports to India have also surged.

As of November of this fiscal year, India imported 4.26 MT of finished steel, up 13.4 per cent year on year, while exports fell 6.2 per cent to 4.03 MT, making the country a net importer of completed steel.

“In the previous fiscal year, steel imports accounted for approximately 5.6 per cent of domestic demand, or 6.7 million tonnes. We predict imports to be around 5.5 per cent this fiscal as well,” said Sehul Bhatt, Associate Director, Research, Crisil Marketing Intelligence & Analytics.

Although worldwide prices rose by 23 per cent in the US and 6 per cent in Europe in November, a few domestic steel mills dropped prices by Rs 1,500 per tonne in December from October list rates, according to Bhatt.