India's steel exports fell by 36% to less than 1.5 million tons in the first quarter (April-June) of the 2024-25 fiscal year, compared to 2.35 million tons in the same period last year. In the first half of calendar year 2024, however, exports fell by a much smaller 4% to around 4.50 million tons from 4.70 million tons last year.
Several factors contributed to the decline in India's steel exports. One of the major reasons was increased allocations and aggressive pricing by Chinese mills targeting India's key markets such as Vietnam, the Middle East and Turkey.
A competitive situation is reflected in pricing, with China offering Vietnam an average of USD 555 per tonne, slightly lower than India's USD 570 per tonne. Similarly, in the Middle East, Chinese prices were recorded at an average of USD 568 per tonne, remaining cheaper compared to India's USD 600 per tonne. This aggressive pricing strategy by Chinese producers is aimed at boosting exports in the face of weak demand in their local markets.
In addition, due to the underperformance of the export market, Indian manufacturers suspended operations, which led to production cuts. Weak domestic demand compounded the problem, pushing factories to reduce production. Despite these challenges, Indian mills managed to keep output low in the first quarter, maintaining higher offer prices compared to China.
India's crude steel production increased by 4.6% to 36.61 million tons in the first quarter of FY25 from 35 million tons in the first quarter of FY24. However, consumption rose 16% from 30.83 million tons to 35.42 million tons, supporting production cuts. Production at major producers such as JSW Steel and Tata Steel fell by 0.57 million tons in the first quarter compared to the previous quarter.
Going forward, the safeguard duty rate for imports into the EU remains at 25% above quota levels. The quarterly hot rolled coil quotas for India are set at 301,704 tons each for July-September 2024 and October-December 2024, 295,145 tons for January-March 2025 and 298,424 tons for April-June 2025. Given that India has already filled certain quotas, exports are likely to remain at current levels or fall further in the coming quarter.
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