India’s steel trade deficit has widened to ₹6,704 crore for the first quarter of the fiscal (Q1 FY25), indicating that import of the metal continued to be higher than exports. In the year ago period (Q1 FY24), the country had reported a trade surplus, wherein exports exceeded imports, by ₹3,698 crore.
Between May-end (2M FY25) – when deficit was ₹4,282 crore - and June-end (Q1 FY25), trade deficit widened by nearly 60 per cent or by ₹2,420 crore as the country’s steel mills lost out on in key export markets to Chinese competition. On the other hand, imports for the period – particularly from China and Japan – witnessed a constant rise.
Import of finished steel was valued at ₹17,341 crore ($2079 million), whereas export of finished steel was valued at ₹10,636 crore ($1,275 million). Thus, overall trade deficit (finished steel) stood at ₹6,704 crore during April – June 2024-25, a Steel Ministry report, accessed by businessline, said.
Losing out in Export Markets
During Q1 FY25, there was 38 per cent y-o-y decline in export volumes of the finished metal to 1.3 million tonnes (mt), with flat steel products declining by over 40 per cent to 1.096 mt. Exports of finished steel in the year-ago period was 2.05 mt of which flats was 1.9 mt.
Amongst key buyers – three European markets witnessed a decline.
Orders from Italy saw a 46 per cent y-o-y decline to 0.269 mt (from 0.5 mt); while there was a 46 per cent decline in value to $234.7 million, as against $ 431.6 million in the year-ago-period.
In case of Spain there was 56 per cent decline to 0.08 mt (from 0.2 mt) and down 61 per cent in value to $ 71.5 million (from $ 183.5 million).
Shipments to Belgium saw a 6 per cent y-o-y decline to 0.158 mt (from 0.168 mt) which in value terms works out to a 20 per cent decline to $136.4 million from $169.5 million.
In case of UAE, there was a 49 per cent y-o-y decline in orders to 0.08 mt, from 0.15 mt. There was a 40 per cent decline to $80 million in Q1 FY25, from $132.4 million in the year-ago-period.
“Steel prices came under pressure be it of lukewarm downstream demand (occasioned by seasonal factors) as in case of India, rising inventories coupled with weak demand as in case of China, weak raw material offers (for scrap) and weak market sentiments as in case of the USA or an overall sluggishness that was reflected in muted transactions as noted for the EU markets.” the Steel Ministry report said.
Rising Imports
The report mentioned Chinese steel imports – already at elevated levels – were up 40 per cent in volume to 0.572 mt overtaking Korea as the key supplier. Import from China was 0.4 mt a year-go-period. In value terms, finished steel shipments were at $677 million-odd, up 32 per cent y-o-y.
Japan saw a 170 per cent increase in imports to 0.5 mt, from 0.18 mt, and shot-up by 71 per cent in value terms to $435 million ($ 255 million).
Meanwhile, Nepal emerged as one of the top five sellers although numbers remained low at 30,000 tonnes (up 69 per cent) and valued at $27 million (up 50 per cent y-o-y).
“Volume wise, hot rolled coil / strip (0.717 mt) was the item most imported (37 per cent share in finished steel). ... China was the largest import market for India,” the Ministry report said.