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

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

The total volume of steel products scheduled to arrive in India could touch 1.6 million mt in July, the data showed.

China leads import surge

The recent surge in steel imports to India is primarily due to an increase in exports from China.

From January to July 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%.

In July alone, Chinese steel is expected to represent a staggering 73% of the total imports.

The bulk of the shipments, which are set to arrive by the end of July, were placed with Chinese and Japanese suppliers between late May and early June, 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.

Vietnam's Formosa Ha Tinh Steel, which acquired BIS certification for HRC exports in early July, has become the most competitive mill in the India market.

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 domestic prices weigh

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.

Platts assessed the spot price of IS2062, 2.5-10 mm thick HRC, excluding 18% goods and services tax, stable at Rupees 50,200/mt ($599/mt) ex-works Mumbai on July 23, according to Commodity Insights data.

Mills seek government support

AM/NS and JSW have been actively engaging with Indian authorities to address the escalating imports from China and Vietnam.

There were market expectations that the government would announce some safeguard measures against steel imports during the country's Union Budget on July 23, but no such measures emerged.

"We remain hopeful that the government will take decisive actions to curb steel imports at predatory prices, which is a serious and immediate concern," AM/NS India CEO Dilip Oommen said in a postbudget announcement July 23.

"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.

South Korean offers are becoming more competitive due to weak domestic demand there, while Japan is also becoming a strong competitor following the yen's depreciation, market participants said.

Major exporters from South Korea and Japan, including POSCO, HYUNDAI, JFE and Nippon Steel, are increasingly active in the export market. HRC shipments from Japan for September delivery were offered at $580/mt CFR India, sources said.