Indian steel imports from Vietnam have resumed over the past week after the Bureau of Indian Standards (BIS) issued quality certification to Formosa Ha Tinh, a leading steel producer in that country, industry sources said on Wednesday, June 5.
Indian imports of certain steel product categories are governed by mandatory quality control orders which mandate that the exporter of steel from overseas has to mandatorily seek quality certification from BIS. The quality certification is issued to a steel exporter based on the application made by the exporter to BIS and certification is issued by the latter following inspection of production facilities.
The sources said a large volume of steel shipments from Vietnam to India has been stuck over the past several weeks as steel mills in that country were yet to receive the necessary quality certification from BIS.
However, with such a certification issued to Formosa Ha Tinh, an estimated volume of at least 85,000 mt of hot rolled coil (HRC) was booked by Indian importers from Vietnam at a price of $590-595/mt CFR about two weeks ago, the sources said.
The revival of imports of steel from Vietnam has led to the domestic steel industry expressing concerns that cheaper imports will have a long-term impact on the growth of the domestic industry. It has been pointed out that the current ex-Vietnam bookings have been around INR 3,000/mt ($36/mt) cheaper than the domestic trade price of HRC.
“The volume of imports is not that much of a concern, but it does act as a dampener on the domestic price,” Tata Steel CEO T. V. Narendran said in a recent statement.
“If it is unfairly-priced imports, we should stop it. Because at the end of the day, if those steel companies are selling steel in India at prices where they are not making money, why should it derail an industry that is investing tens of thousands of crores in creating new capacity?” he said.