Indian Steel Exports posts unprecedented rise
There’s a feel-good story emerging out of India vis-a-vis the steel sector. A recent policy document showed a rise in steel exports in 2017, while a freshly released World Steel Association (WSA) report recorded a growth in crude steel production last year.
The Economic Survey of India 2017-18, a document released just prior to the union budget in India, has said a mix of policy inputs for local steel, the rise in global steel prices and a slew of efforts by the Indian government to protect the domestic steel market from cheap imports had all helped in raising steel exports from India to an “unprecedented” 53% rise during the April-December 2017, during which output rose to 7.6 million tons (MT).
Local consumption itself rose 5.2% during that period to 64.9 MT. Sale of finished steel rose 5.6% to 79.3 MT during the same period, largely because of a boost from India’s core infrastructure sector.
According to the WSA report, India’s crude steel production grew by 6.2% to 101.4 MT in 2017 compared to 95.5 MT in the previous year. While China remained the world leader by producing 831.7 MT in 2017 (up 5.7% from 786.9 MT the previous year), Japan took the second spot, but witnessed a decline in steel output by 0.1% to 104.7 MT in 2017 (from 104.8 MT in 2016).
The WSA report noted world steel production touched 1,691.2 MT for 2017, up by 5.3% compared to the 2016 output of 1,606.3 MT, which sector analysts say is good news.
Specifically, India overtook the U.S. to become the world’s third-largest steel producer.
Back up a few years and India was looking at surplus steel production capacity and the flooding of the market with cheap steel from countries such as China and South Korea.
After some loud complaints by local steel bodies and producers, the Indian government raised customs duty and imposed anti-dumping duty. The Minimum Import Price (MIP) was introduced in February 2016, and all these measures had ensured the recovery by domestic producers, the Economic Survey said.
In between, somewhere in 2016-17, exports started dipping again, and the government then notified anti-dumping duties and countervailing duties on various steel products in February 2017. This included imposition of anti-dumping duties on imports of seamless tubes, pipes and hollow profiles of iron, alloy or non-alloy steel originating and exported from China. Similar duties were slapped on hot-rolled coils (HRC), HR plates, cold-rolled (CR) products, wire rods and color coated steel. The government also levied countervailing duty on imports of stainless steel cold rolled flat products of all grades/series from China, Korea, the European Union, South Africa, Taiwan, Thailand and the U.S.
In 2017, the Indian government rolled out a new steel policy, as reported.
To add to this, preference to locally manufactured select iron and steel products has been enforced since May 2017. These measures have helped keep a check on imports, which went up by only 10.9% in April-December 2017 to 6.1 MT, the Economic Survey said.