India turned net importer of steel once again in October — the second time this fiscal — as cheaper offerings in the downstream sector, that include cold rolled and coated products, shot up while exports slowed down considerably during the month.

Steel imports in October was 5,93,000 tonne, outstripping exports by 2,33,000 tonne. Exports stood at 3,60,000 tonne, data available with the Steel Ministry and accessed by businessline show.

According to trade sources, imports in October was amongst the highest in over two-odd years.

This is for the second time in four months that imports exceeded exports. India had turned net importer of steel in July, the first time since January 2021.

In October, non-alloyed steel imports shot up 69 per cent y-o-y to 364,000 tonne; while alloyed and stainless steel imports were up 41 per cent y-o-y to 2,30,000 tonnes.

Imports up

October 2022 imports were higher by 57 per cent over the same period last year and increased by 19 per cent over September 2022.

Global prices are at a discount to domestic prices, said a source. Compared to the benchmark hot rolled coil prices in India hovering at ₹55,000 – 57,000 per tonne, the international prices have slumped to ₹50,000 per tonne levels. The latter is thus more attractive for the downstream sector.

“Considering that India is the only country globally to have seen a demand growth in steel at a domestic level, international players would look to come in with lower priced offerings,” the mill official said.

Sesagiri Rao, Joint MD and Group CFO, JSW Steel — the country’s largest steel maker — had flagged some of these concerns during the recent analyst call. “But the imports are increasing, that is a matter of concern. If you see quarter-on-quarter, it went up by 23 per cent (referring to previous number) and at the same time exports have fallen,” he had said.

In the April to October period, imports stood at 3.15 million tonne (mt), up 14 per cent y-o-y. However, for the seven-month-period, exports at 3.9 mt, continue to outdo imports.

Some Cheer?

Trade sources said these imports are mostly arrivals which have been booked probably 2-3 months back. Some of them were Russian as well, which have started coming into the market now.

However, from a price perspective, sources say, there is no further drop expected in the current international price. “Maybe (it will) even out in this quarter (Oct – Dec),” Jayant Acharya, CFO, JSW Steel said during the analyst call. “We don’t see too much of imports coming in since viability of international markets to supply at low prices is very limited. Going forward I think imports should also stabilise.”

According to him, international prices are at $620 to $650, and with a depreciated rupee, domestic prices are “not too far off”. “If you take countries which have an import duty into the country, then vis-à-vis I think domestic prices are well placed,” he explained.

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