Indian exports to face pressure from low-priced Chinese steel: SteelMint
China's exports could pose a threat to Indian steel makers by limiting their shipments to the European Union in 2024 if demand remains low, as per SteelMint. "China took over India's traditional export markets such as Vietnam and the Middle East in CY23 with cheaper offers," SteelMint stated. In FY23, India's steel exports were 6.72 million tons, a 50% YoY decrease, while imports hit a three-year high, according to a report from global analytics firm S&P in April.
Domestic steel prices may face pressure
Indian steel users were encouraged to import as domestic prices were at a premium to seaborne offers. SteelMint cautions that if demand doesn't grow at the same rate in CY24, surplus supplies could lead to further pressure on domestic steel prices. To tackle this issue, authorities have started discussions with domestic producers to find ways to curb imports. Officials are also contemplating the introduction of a Production Linked Incentive (PLI) scheme 2.0 to increase production and reduce reliance on imports.
Domestic demand expected to cool in 2024
Despite strong domestic demand due to infrastructure projects, SteelMint predicts that demand will slow down in 2024 as general elections approach and projects may be put on hold until a new government is formed. Funding delays could happen after the formation of a new government, and construction project awards may stall as the election code of conduct takes effect. This potential decline in domestic demand could further impact the Indian steel industry and its ability to compete with Chinese exports.
