The year 2024 was a difficult one for Indian steelmakers, as India’s imports of finished steel from China hit a record high in the first eight-month period of FY25. India also became a net steel importer during this time.
India exported 6.5 millions metric tonnes of finished steel in April to November, an increase of 26.6% year on year. China shipped 1.96 million tons of steel from April to November, up by 22.8%.
The rising imports of stainless steel, hot-rolled plates and coils and other steel products have impacted on the industry as a whole, but MSME producers in particular are under pressure.
The Daily Hodl. The Daily Hodl.
Mantri shares his thoughts on how to deal with the falling number of exports, and whether or not the US President Donald Trump’s tariffs promise will worsen the situation.
Excerpts:
Indian Steel: Domestic Demand is Driving Growth in H2FY25
What is the state of the stainless steel demand in the US? What are growth drivers? Any new, emerging sectors generating demand?
Domestic market growth has been steady in the first six months of FY25 and is expected to continue.
Demand is driven by several sectors including the railway industry, P&T in industrial applications, as well as lifts and elevators.
The industry is moving in a more positive direction with projects like Vande Bharat and Vande Metro, both of which use higher grade stainless steel.
The stainless steel market will be driven by emerging areas such as small modular reactors (SMRs), the E20 initiative for blending ethanol, large water projects including dams and barsrages.
In addition, the government announced that it would spend INR 11,11 trillion in infrastructure for the fiscal year ending March 20,25. This is also expected to boost demand.
The industry faces a major challenge with imports from China
There are still challenges, such as the substandard imports of China, and the need to implement BIS standards more strictly.
Continue to develop India’s stainless steel manufacturing industry.
We can also expect to see demand in new areas, such as renewable energy, the blue-green economy and aerospace.
Invezz, how are things looking on the front of raw materials? Recently, you entered into a joint venture in Indonesia.
Our nickel pig-iron (NPI), smelting plant in Indonesia was commissioned ahead of schedule, marking a significant strategic achievement.
The EU is attempting to reduce scrap imports, and this will ensure greater security of raw materials.
This facility’s ramp-up will improve raw materials security and operational efficiency.
India’s imports of finished steel from China reached a seven-year high in this year. What’s the government’s position on taxing or imposing duties on imported goods from China? How will this impact JSL’s bottom line and revenue?
Imports from China, Vietnam and other countries have adversely affected MSME producers. This has also undermined the “Make in India” initiative and the creation of jobs and skills in India.
Imports that are not level playing pose a significant challenge.
The industry is actively lobbying the government for anti-dumping and safeguard duties.
Countervailing Duties etc. to level the playing field for stainless steel producers in domestic markets.
Jindal is committed to providing stainless steel of the highest quality and continues to concentrate on segments with added value. However, there are significant pressures in the industry, especially for smaller manufacturers. It is therefore crucial to maintain a level playing field.
JSL Diversifies Markets to Combat Global Export Challenges: US & EU Slump
Invezz Invezz: Due to the global economic challenges, your export volume fell 28% in H1. How will the recent US tariff announcements affect India’s steel imports?
Exports have been affected by global challenges including the red sea crisis and west asia conflict, as well as weakening demand in US and EU.
Directly, the proposed US tariffs will not have a significant impact on India’s imports but they may cause ripple effects around the world.
We continue to diversify our export markets. South America, Korea and Canada are all potential regions.
The strength of the domestic market helps to balance out any shortfall.
Invezz : Are you sticking to your revised guidance of 15-20% volume growth?
Our guidance for volume growth in FY25 is still 10-15%.
While global market turbulence caused by the Red Sea Crisis, and weak EU & US demand have had an impact on volumes, our focus on high-value segments, as well as operational efficiency, has helped us to partially mitigate these challenges, allowing for a volume increase of 5% in each of the past two years.
Invezz: The German economic slowdown is contributing to the decline in exports. How do you forecast export volume in the second-half?
Germany and the wider European markets are still facing economic challenges, without any immediate signs of improvement.
We maintain a cautious view for these regions, but our efforts to expand in markets such as South America, Korea and Canada provide us with optimism. For FY25, we remain confident about achieving our 10% export volume projection.
As new information becomes available, this post may change.
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