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  • Gauri S.

India's Steel Imports Poised to Reach 6 Million Tons in FY24 Driven by Robust Demand: Crisil

In the period from April to November 2023, India experienced a notable surge in finished steel imports, totaling 4.26 million metric tons, with projections suggesting it may touch the 6 million metric ton mark in the current fiscal year. This insight comes from a comprehensive report by Crisil, coinciding with a time when concerns among steel players are intensifying due to the escalating import figures.

The global steel industry, grappling with challenges since the onset of the Russia-Ukraine conflict, is anticipated to see a modest recovery with a projected growth of 1.6% in 2023 after a substantial 3.3% decline in 2022, as reported by the global analytics company.

India stands out as a beacon of growth in this scenario, registering a buoyant 13% increase in steel demand, defying the prevailing global trend. The steel sector in India is poised to achieve its third consecutive year of double-digit growth, projected at 11-13%, following impressive growth rates of 11.4% and 13.4% in fiscal years 2022 and 2023, respectively.

Crisil attributes this robust growth to strong domestic demand, bolstered by government investments in infrastructure, building, and construction segments. Despite global industry challenges and a potential slowdown, Crisil anticipates India's steel imports to remain elevated around the 6 million ton mark for this fiscal year.

Adding complexity to the global steel dynamics, Chinese mills have aggressively entered the market, pushing volumes at highly competitive prices. Between January and November of the current year, China's steel exports surged by 35.6% to reach 82.7 million tons, marking the highest figure since 2016. Notably, Chinese exports to India have also witnessed a substantial increase.

As of November in the current fiscal year, India imported 4.26 million metric tons of finished steel, reflecting a 13.4% year-on-year increase. In contrast, its steel exports declined by 6.2% to 4.03 million metric tons, solidifying India's status as a net importer of finished steel.

Sehul Bhatt, Associate Director, Research at Crisil Marketing Intelligence and Analytics, shared insights on the import trend. "Last fiscal, steel imports accounted for around 5.6% of domestic demand at 6.7 million tons. We expect imports to hover around the 5.5% mark this fiscal year as well."

Despite a global uptick in steel prices recorded in November – with a 23% increase in the U.S. and 6% in Europe – a few domestic steel mills have strategically reduced prices by ₹1,500 per tonne in December, aligning with local demand dynamics, as highlighted by Mr. Bhatt. This dynamic pricing strategy underscores the delicate balance between global market forces and local considerations in India's steel industry.

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