India's imports of steel from Japan and South Korea have increased significantly

Release time：Jun 24, 2019 From：admin

Affected by the decline in the growth rate of the Indian auto market in the second half of the fiscal year of 2019 (April 1, 2018 to March 31, 2019), India's domestic steel consumption growth rate from 2018 (April 1 to 2018, 2017) 7.9% of March 31) slowed to 7.5% in FY 2019.

In April 2019, Indian steel consumption demand growth slowed further to 6.4%, and may be lower than the average of the first quarter of 2020 (April 1, 2019 to June 30, 2019), mainly due to The automotive industry continues to be weak and the construction projects are reduced during the Indian election.

Although India's domestic steel demand has shrunk, steel imports have grown a lot, especially from South Korea. From the data point of view, India's imports of steel from China have decreased, but the increase in steel imports from South Korea and Japan to make up for this gap. Some analysts believe that this shows that Japan and South Korea have strengthened their control over the Indian steel market.

According to preliminary data released in April 2019, 57% of India's 6.3 million tons of steel imported from Japan and South Korea in fiscal year 2019, compared with 45% in the same period last fiscal year. The official Indian government said that free trade agreements with South Korea and Japan are leading to an increase in imports. In April, India's imports of steel from Japan increased by 27% year-on-year to 116,000 tons, and the amount of steel imported from South Korea increased by 15% from the same period of the previous year to 245,000 tons.

As the United States and Europe tighten imports of steel from Japan and South Korea, steel traders in Japan and South Korea are seeking to increase their exports to India. It is reported that these imported steel products are mainly used in the production of automobiles.

In response to this situation, the domestic steel industry in India requires a tariff on imported steel products. Recently, Indian Commerce Minister Piyush Goyal and Steel Minister Dharmendra Pradhan have discussed steel tariffs.

In fiscal year 2020 (April 1, 2019 to March 31, 2020), India’s total imports of steel from South Korea increased from US$2.3 billion in fiscal year 2019 to US$2.7 billion, and total steel imports from Japan were from fiscal year 2019. The $1.1 billion has increased to $1.3 billion. At the same time, India’s total imports of steel from China fell from $1.6 billion to $1.4 billion. (see picture 1)

The weak demand for Indian steel also led to a corresponding decline in steel prices. According to a report released by ICRA (Moody's Indian subsidiary), India's domestic hot rolled coil prices will be Rs 41,250/t from the fourth quarter of FY 2019 (January 1 to March 31, 2019). 593.51 US dollars / ton) fell to 40,500 rupees / ton (about 582.72 US dollars / ton) in the first quarter of 2020.

Jayanta Roy, ICRA's senior vice president and group director, said weak demand and steel exports fell 34% year-on-year, making India's domestic crude steel output only increase by 3.3% in FY 2019, at a lower increase. Speed level.

It is understood that in FY 2019, Indian steel imports increased by 4.7% year-on-year, and exports fell by 34% year-on-year, becoming a net importer of steel. Some analysts believe that India's steel imports are expected to decline in the next few months, because the current domestic hot rolled coil prices in India are about 6% lower than the import prices. Although the import volume is expected to decrease, due to weak seasonal demand, India's domestic crude steel output may maintain a moderate growth in the second quarter of fiscal year 2020 (July 1, 2019 to September 30, 2019). It will gradually recover in the second half of the 2020 fiscal year.