Why did India Return to the Ranks of Net Steel Importer?

Why did India Return to the Ranks of Net Steel Importer?
Although India has repeatedly raised its domestic steel production capacity target, it has recently encountered a bit of frustration on the road to realizing the dream of a big steel country. According to the latest data released by India, in the fiscal year of 2019 (April 1, 2018 to March 31, 2019), India’s finished steel exports amounted to 6.36 million tons, down 34% year-on-year. In the same period, imports of finished steel products increased by 4.7% to 7.84 million tons. Exports failed to outperform imports. And after three years, India once again became a net importer of steel. For India, which is trying hard to develop the local steel industry and wants to increase the self-sufficiency rate of steel, this set of data will bring more or less frustration. Glory Steel export steel products all over the world, like SS355 hot rolled steel square bar, hot rolled steel flat bar, etc.
In recent years, in order to get rid of the net importer of steel, the Indian government and local steel companies have also worked hard. With the gradual expansion of production capacity, India has surpassed Japan to become the world’s second largest steel producer in 2018. According to the industry vision, India plans to achieve a target of 300 million tons of crude steel capacity in the 2031 fiscal year. At present, India’s crude steel output has a compound annual growth rate of 5.83%, which is much higher than the world average of 2.25%. However, official data released by India showed that in February 2019, India’s crude steel output increased by more than 4% year-on-year to 8.91 million tons, molten iron production was 6.09 million tons, an increase of 12.1%. It can be seen that the identity conversion from the net exporter of steel to the net importer of steel may not be due to the fact that Indian steel companies do not work hard. There are other reasons.
First, demand growth is faster than capacity release, and the steel demand gap is further magnified.
According to the data, in the planned layout of India’s steel capacity expansion, the annual production capacity of crude steel of Jingdele Southwest Steel Dolvi Steel Plant will be expanded from 5 million tons to 10 million tons, and the annual crude steel capacity of Tata Steel’s Kalinganagar Steel Plant will be expanded from 3 million tons to 8 million tons. With the contruction of annual production capacity of 3 million tons of the Indian National Mining Development Corporation, it is expected that the growth of Indian steel production capacity will be more than 10 million tons, which is considerable. However, these projects will take several years from construction, production to final release of capacity.
Second, the high-end supply is insufficient, and importing is inevitable. To sort out India’s transition from a steel exporting country to a net importing country, we can find that the shortage of high-end steel supply is a factor that cannot be ignored. Among the steels imported from India, automotive steel and high-end electrical steel account for a large proportion. This shows that although the Indian automobile industry is developing rapidly, the demand for local high-end steel is gradually increasing. However, the local high-end products of local steel enterprises are still difficult to meet local manufacturing enterprises in terms of quantity and quality. Demand for steel. Therefore, help in the overseas market is a helpless move, but it is also expected.
Third, the rise in trade friction has led to the loss of traditional export market share. In FY 2019, Indian steel imports increased by 4.7% and exports fell by 34%. It is not difficult to see from this set of data that India has once again become a net importer of steel, and the sharp decline in exports is also a reason that cannot be ignored. It is understood that Southeast Asia, Africa and other places are the main export routes for traditional Indian steel, but with the trade barriers between Europe and the United States, coupled with the Indian market as the world’s important steel consumption growth pole, it is full of attractiveness. Therefore, steel companies in major steel exporting countries such as Japan, South Korea, and China have repeatedly turned their eyes on markets in Southeast Asia and Africa after they have repeatedly hit the wall in Europe and the United States. The competition between them and Indian steel companies has become increasingly fierce. It is also reasonable to squeeze the export market share of Indian steel companies.