India's April-Oct HRC imports nearly double on year; seen falling thereafter

India's imports of hot-rolled coil/strips over April-October 2024, which almost doubled on the year as inflows spiked from China, Japan, South Korea and Vietnam, are expected to ease amid export licenses expiring and rising trade barriers.

The inflows of hot-rolled coil/strips soared by 96.7% on the year to 2.19 million mt compared with April-October 2023. India's financial year runs from April to March, latest provisional data from the Joint Plant Committee showed.

About 846,400 mt came from Japan, which headed the list of top four hot-rolled coil/strip importers, followed by South Korea with 610,000 mt, Vietnam acconting for 447,400 mt and China responsible for 275,000 mt.

Year-on year, the steepest hikes in inflows came from Japan which surged by more than 3.8 times against 221,400 mt, while the imports from China spiked by more than 2.9 times from 94,200 mt.

One factor behind the increased imports from Japan was the yen. Typically, a weaker yen tends to make Japanese exports more competitive and improves earnings from overseas, but at the same time makes imports such as raw materials and fuel more expensive.

Data from S&P Global Commodity Insights showed the Japanese yen stood at 153.05 to the dollar on Oct. 30, 2024, compared with Yen 149.61 on Oct. 30, 2023.

The higher inflows from China were a result of weaker domestic demand and overcapacity which led to Chinese steel exports hitting an all-time high in October.

Similarly, the imports from Vietnam more than doubled to 447,400 mt from 220,700 mt while inflows from South Korea stood at 610,000 mt, up 28.5% against 474,600 mt for April-October 2023.

Imports seen easing in H2 FY

Import volumes into India are poised to retreat significantly towards the second half of the Indian financial year, with fewer bookings from China and Vietnam recently and rising trade barriers.

For instance, India launched an antidumping duty probe into Vietnamese HRC in August 2024 and into cold-rolled non-oriented electrical steel (CRNO) from China in September.

Meanwhile, Chinese steelmakers have lost their access to export to India with Bureau of Indian Standards (BIS) certificates expiring. Also, BIS and the Indian steel ministry are revising the BIS standards for steel to cover almost all grades of steel.

Many market sources told Commodity Insights that it would be hard for Chinese steelmakers to renew their BIS certificates, with local steel mills in India lobbying the government to put up safeguard duties to protect the domestic market.

Indian domestic HRC market has been trending down for 2024, with the Platts India domestic HRC price assessed at Rupees 48,000/mt ($568) on Nov. 26, retreating by 18.6% from a peak level in October 2023.

This was mainly due to sluggish domestic steel demand, especially from the automotive industry, coupled with the high influx of cheap import materials, sources said.

Tata Motors saw its passenger vehicle sales over July to September fall 6.1% on the year to about 130,500 units, driven by slow consumer demand and seasonal factors, it said Nov. 8, adding that it remained "cautious on near-term domestic demand."

Amid the bearish domestic market factors, Indian exports of hot-rolled coil/strips over April-October 2024 more than halved from the year before, sinking 53.2% to 507,600 mt, amid lower demand from Europe and Nepal.

Outflows to Italy sank 58.2% to 142,100 mt and to Belgium were down nearly 2.5 times from to 29,900 mt. Exports to Nepal fell 16.7% on the year from 233,600 mt to 200,100 mt.

Trade data showed that India was a net importer of finished steel over April-October with imports at 5.77 million mt and exports at 2.75 million mt, up 42.1% and down 29.3%, respectively, compared with the year before.

Platts is part of Commodity Insights.