India to Be a Net Exporter of Steel This Year

India to be a net exporter of steel this year as finished steel production growth reaches an all-time high in February but domestic consumption remains tepid, broker company Emkay Research said in a report today.

According to the provisional data furnished by the Joint Plant Committee (JPC), finished steel production grew significantly by 13% year-on-year in the month of February, to 8.8 mt. Maximum production growth was seen by Tata SteelBSE -1.18 %, followed by SAIL, RINL, JSW and then JSPL. JSW and JSPL grew at a consolidated level by 19% to 52 mt.

While imports fell by 46.1% YoY in the same month on the back of protectionist measures taken by the government, exports continued to rise and almost doubled on a year-to-date basis to 6.6 mt from 3.7 mt in the previous year.

Despite an optimistic sentiment, consumption for finished steel remained low at 7.3 mt, growing only by 3% YoY. Owing to the low domestic demand, manufacturers are being encouraged to export.

The Indian steel sector has been seeing a boom in production as more facilities are being commissioned. However, domestic demand has not been able to get the jump it needs. Retail demand has been hit, in some parts by demonetisation as well. In February, India had extended the anti-dumping duty on some steel products from China in February, in order to protect manufacturers from cheap imports. Emkay said the the government is likely to make the ADD permanent for the next five years soon.