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India Emerging As Fastest Growing Steel Consumption Market

Updated: Jun 14, 2024 04:18:59pm

India Emerging As Fastest Growing Steel Consumption Market

New Delhi, Jun 14 (KNN) India's domestic steel makers are grappling with a dual challenge - sluggish local demand and a slump in Chinese real estate weighing on exports.

The sustained high output from Chinese steel mills is also impacting India's steel shipments to key markets like Vietnam and the United Arab Emirates (UAE).

However, India's growth as the fastest expanding steel consumption market provides an opportunity for imports. "As long as appetite for steel keeps growing, India would allow Chinese imports," said Amit Bhargava of KPMG India.

India's steel exports declined to Rs 98,117 crore in fiscal 2023-24 from Rs 1,06,919 crore in the previous year. Exports to the UAE, one of the top destinations after the European Union, fell to Rs 5,367 crore from Rs 8,400 crore.

"India's share of steel exports to the UAE has dropped to 6.9 per cent in FY24 from 10.4 per cent in FY23," said Sumit Jhunjhunwala of ICRA Limited. With China's real estate sector yet to recover, the country is offloading excess steel output in foreign markets, even below production costs.

On the domestic front, low-priced Chinese imports are putting pressure on Indian steel prices. The landed cost of Chinese hot rolled coil in May 2024 was around Rs 53,000 per tonne, undercutting domestic prices of Rs 53,900.

While higher infrastructure spending post-elections could boost steel intake, Indian producers may seek protection if margins get squeezed by cheaper imports amid high raw material costs.

(KNN Bureau)


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