India turned net importer of steel in July-September period (Q2) of FY24, first time in three-odd years, with nearly 1.50 million tonnes (mt) of finished offerings coming in during the period. This is up 8 per cent on a year-on-year basis. Steel imports were higher than exports by 0.34 mt (exports were 1.16 mt).

Price pressure from China, slowing European demand because of recessionary pressures, and lack of clarity on Carbon Border Adjustment Mechanism (CBAM) reporting guidelines, and better realisations in domestic market continue to impact exports. In the year ago period (Q2FY23), exports (1.41 mt) outdid imports (1.38 mt) by a slender 0.03 mt.

According to a report by the Steel Ministry, accessed by businessline, September remained one of the worst months for Indian mills, as outbound shipments (exports) slid down by over 73 per cent Y-o-Y to just 0.16 mt, while imports, despite a 24 per cent drop, remained at 0.38 mt. Imports were substantially higher by 0.22 mt.

Last year during September, exports were 0.6 mt and imports at 0.5 mt.

Muted demand

Provisional data for July and August show that steel exports were 0.52 mt and 0.48 mt, against which the corresponding imports were at 0.59 mt and 0.53 mt, respectively.

“There is some price pressure across global markets which have impacted exports. Demand remains subdued and with no immediate price change in key markets expected, offers in the EU, ME (Middle East) and South-East Asia (Vietnam) are on hold. Domestic market realisations are more attractive at the moment over exports and that is where Indian mills are concentrating on,” said a trader.

For the first half of FY23 (April – September), exports dipped 10 per cent YoY to 3.2 mt; while imports jumped 13 per cent to 2.9 mt, the Ministry report said.

Low cost China products

According to market research firm SteelMint, export offers are on hold with European buyers who seek more clarity on hot rolled coil shipment volumes, specially in relation to carbon emission / usage standards. Offers there are range-bound at $685-700 per tonne, indicative of slowdown and further price drops are expected.

In Vietnam – a key buyer market – there is poor demand and high influx of low-cost Chinese offerings, which forced mills to turn to Indian markets for selling excess stocks over the last few months. Hoa Phat, the largest steel maker there, has further cut prices.

In the Middle East, lower-priced Chinese products coming in at $585-595 per tonne , or cheaper by nearly $25 per tonne over Indian offers. At $620-630 per tonne , Indian steel is the costliest among South-East Asian offerings to the ME. Offers from Japan and Korean mills are at around $615 per tonne.