At a time when global steel prices are trading at multi-year lows, Indian companies fear an increase in cheaper import. In the calendar year so far, the China HRC price has fallen 24.2 per cent and trades at $307 a tonnes; the CRC price is $404, down 22.3 per cent. Iron ore in China is trading 30.4 per cent lower in 2015 from a year before, at $49.6 a tonne.
About 15 per cent of India's consumption is met from import and companies are operating at 75-80 per cent capacity. However industry feels that domestic prices may have bottomed out.
ALSO READ: Govt's push to curb steel imports could hit small mills
Jayant Acharya, director, commercial & marketing, JSW Steel, said: “China's surplus production has led to a crash in prices. Due to this, the country is now selling its excess to other countries. In such a scenario, we are seeing global prices correcting and this will also put pressure on Indian prices, which have already corrected. Domestically, I think steel prices have bottomed out and will remain range-bound. For this month, JSW Steel has rolled over prices.”
An Indian Steel Association official said they'd continue to be in dialogue with the government to increase the import duty, to provide support to domestic manufacturers.
ALSO READ: India overtakes US as 3rd largest steel producer: Tomar
Pinakin Parekh, metals and mining analyst at JPMorgan India, said in a report: “Domestic Chinese HRC prices hit 16-year lows, while benchmark CIS and China HRC export prices are at 10-year lows. The last time steel prices hit such levels, the dollar was at Rs 45 a decade ago; it is near Rs 64 now.”
“Even India’s steel external trade has reversed. In 2003-04, our steel imports were 1.5 million tonnes, while exports were 4.5 mt. In FY15, steel imports were 9.3 mt, while exports stood at 5.5 mt. Effectively, imports are currently at 15 per cent of monthly consumption.”