India may become net steel exporter this year

The Dollar Business Bureau

India could become a net exporter of steel this year, as the international prices of the metal has seen a rebound, while the domestic market has seen cost-push and a decline in retail sales, courtesy of Prime Minister Narendra Modi’s demonetisation scheme.

During April-November 2016-17, India’s steel exports grew 53% over the corresponding period of last year. Imports of the metal, however, dropped 39% to 4.73 metric tonnes during the same period.

As there is still a quarter to go in the current financial year, steel sector is expecting steel exports to surpass imports. Last year, steel imports grew considerably to reach 12.7 metric tonnes while exports stood at 4.6-4.7 metric tonnes.

Cost-push has pushed prices of the metal in the international market. Coking coal prices have registered a constant growth over the period. International prices of premium hard coking coal have witnessed 116% to settle at $200 a tonne for the third quarter of the current financial year. Moreover, spot prices rose to $315 a tonne from $90 a tonne.

Meanwhile, international steel prices have increased to over $100 a tonne in the last three years. Major countries had imposed anti-dumping charges against steel imports from China, which in turn, has helped India.

Meanwhile, China’s steel consumption has improved, Europe’s market is picking up, and North America’s market has also been doing well. This has also steadied overall global prices.

India has been taking restrictive measures, such as imposing anti-dumping duty, minimum import price and safeguard duty- to lessen imports of cheap steel imports from China, South Korea and Japan while also to help the domestic market.

The pick-up in international prices has helped the companies beat the government’s November 8 decision and it instant impacts. Retail sales have taken a massive hit, which has encouraged companies to focus more on exporting the metal to balance their growth.