‘India’s steel imports from S. Korea, Japan may rise’

India is likely to witness an increase in steel imports from South Korea and Japan in the near term due to global readjustment of trade patterns after the U.S. imposed a 25% import tariff on the commodity, rating agency ICRA said in a note.

Both South Korea and Japan, which have free trade agreements (FTA) with India, are expected to raise their exports to countries with which they have such pacts, following the move by the U.S.

Together, the two countries exported about 5 million tonnes (mt) of steel to the U.S. in calendar 2017.

ICRA, however, said the impact of U.S. tariffs may not be significant in the medium term as 26 mt of affected imports to that country would be absorbed by the 25 mt increase in the global demand elsewhere, especially in emerging economies.

Also, Chinese steel exports had been declining in the last two years, reaching 75 mt in 2017 from a peak of 112 mt in 2015, providing an opportunity to other countries to fill this gap left by China, by diverting volumes away from the U.S.

‘Meagre exports to U.S.’

“India’s steel exports to the U.S. remained a meagre 0.7 mt in [calendar] 2017,” said Jayanta Roy, senior VP, ICRA. “India’s steel mills should be able to find an [alternative] market for its nominal U.S. export volumes without much difficulty.”

Agreeing, P. Madhusudan, CMD, Rashtriya Ispat Naigam Ltd., said, “The National Steel Policy 2017 envisaged an additional investment of ₹10 lakh crore in capacity addition by FY31. [Jobs] generation would increase to about 36 lakh from the current 25 lakh.”

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