INVC NEWS
New Delhi : The recent surge in imports and a substantial dip in demand have significantly impacted steel prices in New Delhi. This shift arises from the simultaneous increase in imports and a substantial drop in demand. Consequently, the prevailing conditions have compelled the steel mills in the country to slash their prices. This contrasts with the global trend where steel prices are on the rise. Industry sources indicate that steel companies have suggested reductions in retail prices by two to three percent for December to align with market levels. One of the major steel producers noted that this reduction was necessary to compete effectively in the market post the influx of imports. The steel industry has expressed concerns about the escalating imports, particularly concerning the cheaper materials from China, over the past few months. These worries have been voiced to the government as well.
The Industry’s Perspective
Ranjan Dhar, Chief Marketing Officer of ArcelorMittal Nippon Steel India, remarked that the Indian steel sector is currently grappling with challenges generated by import-related hurdles but is optimistic from a long-term perspective. He highlighted that businesses have been operating at prices below the landed costs for the past one to two months. Jayant Acharya, Director and CEO of JSW Steel, pointed out that the intensity of imports is increasing due to a weak external environment. He noted that alongside robust domestic demand, India has become an attractive market for global trade due to its competitive prices.
Factors at Play
China remains the largest contributor to steel imports into India, accounting for an increase of up to 52 percent. Additionally, imports at zero-duty levels from Free Trade Agreement (FTA) nations have also surged. Acharya highlighted efforts undertaken by some to operate on negative margins and the attempts to channel that material into India.
The Government’s Role
The Steel Ministry and relevant authorities are monitoring the situation closely. They are assessing the impact of these imports on the domestic steel industry. Discussions are ongoing on possible measures to counter the escalating imports, including reviewing and potentially revising trade agreements.
Steel industry in India battles
While the steel industry in India battles the challenges posed by increased imports and competitive pricing, it maintains an optimistic outlook for the long term. The immediate focus remains on stabilizing the market by aligning prices with global trends and addressing the influx of cheaper imports.
