Steel mills in India reversing import woes with export push

20 Mar 2017

India is set to become a net exporter of steel for the first time in four years, reversing a trend that saw domestic mills battling a flood of cheap imports.

” This is a very positive development and it would indicate that the Indian steel industry is globally competitive in terms of quality and prices,” Sanak Mishra, the Indian steel Association secretary general, said. The nation’s production is forecast to top 100 million metric tons in the fiscal year starting April 1 as the big producer’s commission more capacity and look to boost exports, he said.

Lured by a rebound in global product prices, mills including JSW and Steel Authority of India Ltd. are relying on the export market to soak up excess inventories after boosting output in anticipation of Prime Minister Narendra Modi’s infrastructure push.

Exports surged almost 78 percent in the 11 months to February to 6.6 million tons, while imports have plunged 39 percent to the same figure, according to Steel Ministry data. Output jumped 11 percent to 92 million tons amid consumption growth of 3.4 percent to 76.2 million tons, it said.

SAIL shares rose 5.4 percent to 63.30 rupees at 2:33 p.m. in Mumbai, while JSW Steel climbed 5.2 percent to 193 rupees and Tata Steel advanced 4.1 percent to 498.50 rupees.

Top producer SAIL aims to double exports next fiscal year, the company said March 1. It exported 682,000 tons in the April-February period, with shipments last month climbing to the best in a decade. Exports from JSW Steel, the second-biggest mill, have been as much as 26 percent of sales in the July-December period, according to the Mumbai-based producer.

It’s a sharp contrast to a year ago, when India was inundated with cheap supplies from China, the biggest producer and exporter, with the country importing a record 11.7 million tons in 2015-16. The government initiated a number of trade measures such as a floor price on shipments, safeguard taxes and anti-dumping duties to stem the inflow.

The nation is expected to have balanced imports and exports this year, said Mishra. India remains a key steel consuming country and the local market, which is forecast to grow at 5 percent next year, will still be the main destination for its producers, he said. He didn’t provide specific forecasts for 2017-18.

Source – Bloomberg