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India’s Steel Ministry has initiated discussions with the Ministry of Commerce on curbing increased influx of cheap Chinese import of the metal, a senior official aware of the discussions said. A probe into imports from Vietnam is also being considered.
The discussions come amid persistent calls for higher tariffs from top producers even as India turns net importer. According to the Ministry official, the industry has also called for an investigation into steel shipments coming in through Vietnam. Preliminary discussions suggest a good portion of low-cost imports from China are being routed into India through Vietnamese traders.
“We have monitored the rise in imports, and have alerted the concerned ministry, in this case the Commerce Ministry. Discussions with them (Commerce Ministry) are underway to take necessary steps,” the official told businessline.
The Steel Ministry official said demand continues to be depressed in China while there have not been any production cuts in the region. Prices remain depressed. And as a result, excess stock is being exported across Asian, Middle East and LatAm nations, “sometimes at less than cost price”.
Rising trade deficit
India turned net steel importer in FY24 and the trend continues so far this fiscal, with finished steel imports scaling a five-year high in April and May, as per government data.
The trade deficit in the first two months of the fiscal stands at ₹4,284 crore, which is 47 per cent of ₹9,036 crore reported last fiscal.
A Steel Ministry report mentioned that import of the metal was valued at ₹11,831 crore ($1,419 million) in April and May, while exports were valued at ₹7,547 crore ($905 million). In volume terms, imports stood at 1.3 million tonnes (up 37 per cent y-o-y) outpacing exports at 0.94 mt (down 40 per cent y-o-y).
Last fiscal China emerged top importer of steel to India (replacing Japan). Vietnam emerged among top five suppliers too. In April and May months, one out of every third import was from China (32 per cent) – still the largest supplier, with Vietnam coming in at four displacing Taiwan.
The Vietnam factor
“There are concerns about steel imports from Vietnam. The industry is alleging that Chinese shipments to Vietnam are at elevated levels. And excess stock is now being routed into India. So representations were made to probe imports coming from Vietnam. And the same is under consideration,” a second official added.
As per data released by consultancy firm BigMint, India is amongst the top five countries where steel shipments (from China) went up. Between January and May of 2024 there were 1.10 mt of the metal shipment coming in, up 51 per cent y-o-y. In the year ago period, shipments were around 0.73 mt.
Other countries where Chinese shipments moved up include Vietnam at 5.51 mt, up 89 per cent y-o-y (the highest among all nations); followed by Brazil at 1.45 mt, up 60 per cent y-o-y and UAE at 2.18 mt, up 53 per cent for the January–May period of this year.
Till FY23, Vietnam was one of the major buyers of steel from India.
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