India steel imports likely to hit seven-year high in July on spurt in Chinese inflows

India steel imports likely to hit seven-year high in July on spurt in Chinese inflows

India's steel imports are anticipated to surge to a seven-year high, led by increased inflows from China, according to S&P Global Commodity Insights data.

From 2024, China has overtaken South Korea as the leading steel exporter to India, comprising 43% of India's total steel imports, while South Korean shipments made up 31%.

The bulk of the shipments, which are set to arrive by the end  were placed with Chinese and Japanese suppliers between late coinciding with a downturn in Chinese steel prices and while domestic HRC prices in India were at Rupees 54,000/mt.

"Current bids from India are too low; we can't command any premium compared to other regions, but it's better than nothing," a Chinese exporter said.

Only Baosteel and Bengang in China possess BIS certificates, but certain Indian importers have the capability to import steel products without a BIS certification as raw materials and subsequently export the finished goods after processing.

Vietnamese HRC for September shipment was sold at $560/mt CFR Mumbai and at $553/mt CFR Chennai, while Chinese HRC was offered at $540-$545/mt CFR India.

Chinese offers are lower but less competitive compared with Vietnamese, considering the 7.5% import duty, according to sources.India is facing challenges in both its domestic market and the export sector.

Chinese CRC was said to be secured by Indian importers at $610/mt in mid-July. Even after accounting for a 7.5% import tariff, the material was still over Rupees 4,000/mt cheaper than domestic CRC, according to sources.

Indian exporters are also struggling with subsiding demand in Italy during summer, according to traders.Offers for Japanese imports were at Rupees 51,000/mt ex-stock Mumbai, rendering domestic ex-works prices uncompetitive.

There were market expectations that the government would announce some safeguard measures against steel imports during the country's Union Budget, but no such measures emerged.

"It's difficult to curb Vietnam imports since India also exported significant quantities to Vietnam in the first half," said an India-based trader.

Some others expected that with the sudden surge of imports from China, the possibility of government intervention was rising.South Korea was the largest exporter to India, constituting 45% of the imports in 2023, according to Commodity Insights data.

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