04-08-2016

India Seen Importing More Steel Than Expected Amid Chinese Flood

Steel

India will probably keep importing large amounts of steel as top producer China shows little signs of slowing supply, according to JSW Steel Ltd., the country’s second-largest maker of the material.

India’s total imports will come to 7 million to 8 million metric tons in the year through March, said Seshagiri Rao, joint managing director of the Mumbai-based company. That’s more than the 6 million tons forecast in February after the government imposed a minimum import price regime to curb shipments.

Even though steel prices have rebounded this year, record exports of cheap supplies from China still pose risks for the global industry, JSW Steel Chairman Sajjan Jindal said last week. India’s inbound shipments of cheaper alloys jumped to a record 11.7 million tons in 2015-16, prompting the nation to introduce floor prices for six months though Aug. 5.

While expectations for imports to drop sharply helped boost JSW Steel’s shares by almost 60 percent since February, the decline in shipments has been lower than anticipated. The country is bringing in about 600,000 tons a month as buyers use trade policies to get around the restrictions, according to Rao.

“There is circumvention which is happening and imports are still coming into India in a reasonably big way,” Rao said by phone from Mumbai. “There is a need for the extension of MIP when there are no other trade remedial measures like anti-dumping or countervailing duty.”

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Steel Secretary Aruna Sundararajan said last month that the government will review if it should extend minimum import prices from August, depending on whether permanent measures such as anti-dumping duties are introduced. Even if the measures are imposed, the floor price should be extended another six months and expanded to other steel products not covered by the current plan, Rao said.

Another concern is that Indian production is growing while demand remains muted, he said. Output in April to June rose 3.8 percent to 24.5 million tons from a year earlier, while consumption was little changed at 19.9 million tons, according to the Steel Ministry. Imports fell 31 percent to 1.8 million tons.

Source: Bloomberg

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