Steel imports see steepest decline in over a decade

Import of steel, which has been a cause  of much pain for the domestic industry in the past two years, fell over 30 per cent - the steepest decline in over a decade--in the first quarter of 2016/17 at under 1.8 million tonnes.

The fall was a direct result of a host of measures taken by the Indian government in the past 11 months including imposition of anti dumping duty, increasing import duties on various grades of steel and finally, and levying an import parity price to curb the alleged dumping of the commodity from China, Japan and Korea.

Imports had grown over 20 per cent in 2015/16 following an even more staggering 71 per cent growth in 2014/15. India has been the only major market to post an increase in consumption of steel in the past two years, a position it has retained in the first six months of 2016, and the increased imports meant countries like China and Japan benefited more from the higher demand than domestic companies like Steel Authority of India Ltd, Tata Steel, JSW Steel and Essar.
 
India was the third largest producer of steel in the first half of 2016 at 46.38 million tonnes, and is closing in on Japan that produced 52.6 mt of steel in the same period.

India's production grew by 2.7 per cent that was higher than all other major countries like China (-1.1 per cent), Japan (-1.1 per cent), US (0.2 per cent), Germany (-1.2 per cent), Russia (-1.3 per cent) and Brazil (-13 per cent).

The Indian government has set a production target of 200 million tonnes by 2020 that, if achieved, would easily see India overtake Japan as the second largest steel producing country in the world. By 2025, production is expected to hit 300 million tonnes.

"Indian steelmakers say they have made investments in new capacity to ramp up steel output this year by 10-12 million metric tonnes and need government policy against imports to protect their investments and the banks that financed them," says Charlotte Rao of Platts, S&P Global. "If Indian steelmakers maintain this level of production for the rest of 2016, India will likely produce 100 million metric tonnes of steel by the end of its current fiscal year in March 2017, and it would only narrowly miss toppling Japan as the world's second largest steelmaker after China."