India’s steel trade deficit (excess of imports over exports) for April-September 2024 (H1FY25), in value terms, has widened to ₹19,404 crore, more than doubling over FY24 levels of ₹9,036 crore, as the country continued to remain a net importer of the metal.

Rising Chinese shipments, including routing of the metal offerings via Vietnam, coupled with declining exports have skewed trade numbers, as per a report by the Steel Ministry, accessed by businessline.

In the year-ago-period, India was a net exporter of steel with the trade surplus – excess of export over imports – being valued at ₹234 crore (imports at ₹26,923 crore and exports at ₹27,157 crore.)

Volume-wise, imports for H1FY25 was 4.73 million tonnes (mt) – up 42 per cent y-o-y and valued at ₹39,060 crore; while export was at 2.3 mt – down 36 per cent and valued at ₹19,656 crore, indicating continued pressure in the sector.

“In China, prices softened y-o-y, but saw a marginal uptick month-on-month backed by seasonal steel demand recovery in both construction and manufacturing sectors; in addition to steel output cuts and lower steel inventories. As regard to flat steel products, prices generally witnessed a declining trend during the month (September) barring stray aberrations. Cheap import offers kept the market sentiment bearish in India while prices inched down in the European Union amid continued market slump,” the Ministry report noted.

Rising Chinese imports

Nearly one out of every three steel shipment (in volume terms) continued to be from China, the Ministry data showed. Around 1.44 mt of the metal came into India over the first six months of the fiscal, indicating an over 36 per cent y-o-y. China was the largest import market replacing Japan and Korea – the two traditional large importers of the metal. Nearly 40 per cent of the shipments coming in – around 0.56 mt – was in the alloy or stainless steel segment.

Electrical steel sheets, galvanised plates and sheets, and steel plates were amongst the most imported items into the country, higher than other key seller markets (importers) of Japan and Korea.

On the other hand, imports from Vietnam saw a 124 per cent y-o-y increase for the first half of the fiscal to 0.43 mt. In the year-ago period, it was around 0.19 mt.

“China and Vietnam together accounts for close to 40 per cent of the total steel shipments coming in first half of the fiscal. We believe there is some credence to the allegation that Vietnam is being used to route Chinese steel shipments. So we are firming up the BIS standards, strengthening the permissions and also looking into melt and pour norms, among others. We are asking BIS to come up with more standards so that any type of steel coming into India is registered,” a senior Ministry official said.

Exports pick up

Market intelligence firm BigMint in a recent report said, that West Asia export market for Indian steel mills are witnessing revival, after prolonged slowdown and price competition from cheaper Chinese offerings.

Offers to West Asia resumed reportedly after six months with Indian exporters quoting around $560 per tonne, down $10 week on week (w-o-w), and nearly 20,000-25,000 tonne of hot-rolled coils (HRC) were booked, the market intelligence firm said.

West Asia has over the last few months stopped being amongst the top five buyers of Indian steel.

On the other hand, Europe — Italy, Spain and Belgium — and the UK are the largest buyers of Indian steel, close to 50 per cent of the export shipments for H1FY25 or 1.1 mt of 2.3 mt.

India’s HRC offers to Europe remained stable w-o-w to $590-595 per tonne, as per BigMint data.