India’s steel exports in May this year were estimated at 1.284 million mt, up about 192 percent from April, data sourced from the Ministry of Steel shows.
The government data revealed that around 27.9 percent of export shipments in May went to China, up from 19 percent of total shipments in April. Indian exports to China in the first three months of the current calendar year were at low levels.
The rising steel exports to China come at a time of sharp deterioration in Sino-India relations following military clashes along the borders of the two countries, while the Indian government is working to introduce a slew of measures to check imports from China.
It has been learned that the Indian government is working on increasing customs duties across a range of imports from China including capital goods. Reports have come in that Indian customs at various ports have stopped clearing all consignments originating from China.
“Exports to China are a temporary phenomenon, a very rare thing to happen. Since Chinese mills were producing at lower capacity during the December-March period, there was a short-term supply disruption. Steel mills there are producing at 80-85 percent capacity in June, which is expected to go up to 100 percent in June. Exports to China have already tapered off,” V R Sharma, managing director of Jindal Steel and Power Limited (JSPL), said in a statement.
JSPL is already scouting for newer steel exports markets in Indonesia, Taiwan, the Philippines, Malaysia, Australia and the Middle East.
Though industry officials are reluctant to comment on Sino-India relations on record, at least two officials said there is serious concern that China will take retaliatory measures if India pushes ahead to put tariff and non-tariff barriers on imports from China and this would be to the detriment of Indian steel producers. The latter are largely dependent on the emerging high-volume export markets in China at a time when domestic demand continues to remain at the lowest levels and local steel mills are compelled to increase capacity utilizations to offset fixed costs.