India has become net exporter of steel to China as manufacturers explore global opportunities with the slowdown in domestic demand.
Steel exports have accounted for ₹19,267 crore so far this fiscal, while imports are at ₹16,369 crore despite border tensions with China. The US and China were top destinations for steel exports, while China and Germany stood as the top sources of imports for India.
Cost advantage
Overall, exports for the current fiscal are expected to surpass that of last year and have already reached 70 per cent of FY21 level.
Srinivas Manoharan, President, Shri Bajrang Power and Ispat, said exports will continue to remain strong as China has announced a bailout package to sort out the real estate problem.
India also has a cost advantage over China with the restrictions levied to contain pollution and achieve greenhouse emission targets, he said. Moreover, India has established itself as a credible exporter and managed to capture some of the market vacated by China. In fact, Bajrang Power and Ispat has managed to complete an export order of steel pipes to China and is exploring further opportunities, he added.
India is the third-largest manufacturing hub of steel pipes in the world and steel pipes constitute 8-10 per cent of the steel consumption. The Tata Steel-JSW Steel-SAIL combine is expected to produce 21.4 million tonnes (mt) this fiscal against last fiscal’s 16.71 mt, a growth of 28 per cent. The installed capacity is estimated to touch 140 mt by FY25. The production linked incentive scheme announced for speciality steel — to be implemented over FY24 to FY30 with a budgetary outlay of ₹6,322 crore — will further boost the steel industry, said Infomerics Valuation and Rating in its ‘Steel Industry: Trends & Prospects’ report.
Challenges ahead
Despite sustained production and trade, steel companies face challenges over coal shortage. Further, global inflationary trends also pose a threat of rising prices, including those relating to essential inputs, said the report.
Source: The Hindu
