India’s Steel Mills Faces Crisis Amid Chinese Import Surge

New Delhi, Dec 4 (KNN) India's construction boom, characterized by gleaming high-rises and expansive highways, was anticipated to fuel robust domestic steel demand.

Instead, smaller steel mills, like those of the Jogindra Group in Punjab, are grappling with unsold inventory as cheap Chinese imports flood the market.
India, the world’s second-largest steel producer, became a net importer last fiscal year, triggering alarm over the sector's future.

Small and medium-sized mills, accounting for 41 per cent of India’s total steel output and employing 1.5 million workers, have seen capacity utilization drop by nearly a third in six months.

In Punjab’s "steel city," Mandi Gobindgarh, local mills are unable to compete with Chinese steel priced up to 10 per cent lower.

"If this persists, we may lay off 10-15 per cent of our workforce," warned Jogindra Group Chairman Adarsh Garg, who reports a sales drop of 30-35 per cent.

The Builders Association of India highlights the financial allure of Chinese steel, which undercuts Indian prices by USD 25 to USD 70 per metric ton. Imports of Chinese finished steel surged over 30 per cent this year, including hot-rolled steel for construction and galvanised steel for automobiles. This has eroded domestic and export markets alike, with major Indian players like JSW Steel and Tata Steel backing calls for import curbs.

China, which produces more steel than the rest of the world combined, has intensified exports after its property crisis dampened domestic demand.

This glut has destabilised global markets, with Indian steelmakers reporting a profit margin slump of up to 91 per cent.

New Delhi is under pressure to act swiftly, balancing the industry’s 2.5 million jobs and infrastructure needs with economic challenges.

Import restrictions, under government review, could take months to implement, further straining smaller mills already considering production cuts and layoffs.

“Prices have fallen so low that everyone is bleeding,” lamented Nitin Kabra of Maharashtra’s Bhagyalaxmi Rolling Mill. As steel prices plummet to three-year lows, India faces a crucial test: safeguarding its steel sector to support its infrastructure ambitions and workforce amidst fierce global competition.

(KNN Bureau)