Indian steel imports will remain elevated at 6 million mt in fiscal 2023-24, according to a report of rating agency Crisil on Thursday, December 21.
The report said that high imports were a fallout of slowdown in global steel industry and strong demand in India supported by government spending on infrastructure and construction.
Global steel demand, which has been subdued since the onset of the Russia-Ukraine conflict, is expected to grow 1.6 percent in 2023, after a sharp decline of 3.3 percent in 2022 but demand remains sub-optimal across economies, the report said.
The tepid growth rate globally is at a time when demand growth in India remains at a buoyant 13 percent with the steel sector poised to clock double digit growth for the third consecutive year, the report said.
Meanwhile, demand in China, which is the world’s largest producer of the commodity, has started reviving after a three-year slump. However, oversupply has led to subdued prices. Over the past few months, Chinese mills have been facing margin pressure, mainly due to high raw-material prices and a depreciating yuan.
Chinese mills have started pushing volumes into the global markets at highly competitive prices. Between January and November this year, exports from China have increased 35.6 percent to 82.7 million mt and in fact, Chinese exports to India have also surged, Crisil said.
However strong growth momentum has supported steel prices in India, and import volumes have increased significantly, driven by better realisation opportunities, the report said. As of November, this fiscal, India had imported 4.26 million mt of finished steel, up 13.4 percent on-year even as its exports declined 6.2 percent to 4.03 million mt, making the country a net importer of finished steel.