OF STEEL COS AND CHEAP IMPORTS

INDIAN STEELMAKERS FACE MOUNTING PRESSURE AND INCREASED INVENTORIES AS CHEAPER IMPORTS FROM CHINA, SOUTH KOREA AND JAPAN CONTINUE TO RISE. THE NEED OF THE HOUR: MORE GOVERNMENT INTERVENTION.

- NEVIN JOHN

IN 2015, an investigation by the Directorate General of Safeguards, later renamed as DG Anti-Profiteering, found that the increased imports of certain kinds of steel had “caused serious injury” to domestic producers. China, Korea, Japan and Russia were dumping steel products, including hot-rolled steel and other variants, which shaved off a major portion of profits from the books of domestic steelmakers. Finally, the government had to step in to ensure a level-playing field, and impose a 20% levy on import of certain categories of steel.

Cut to 2024, and it’s a deja vu of 2015 for Indian steel companies. Steel imports in the first half of FY25 increased 41% to 4.7 million tonnes (MT), against a year ago, while exports slumped 35.9% to 2.3 MT, as steelmakers in China slashed output and cleared inventory by exporting at discounted prices to avert bankruptcies, amidst the country’s protracted property crisis. The result: According to industry estimates, domestic producers are sitting on steel inventory worth ₹90,000 crore.