August 5, 2024 in News
China routing cheap steel imports via South East countries could derail Indian steel investments: TV Narendran
China could be routing cheaper steel into India through South East countries which can derail the investments made by Indian steel industry, T V Narendran, Managing Director, Tata Steel told businessline.
“The Indian steel industry has been a good example of private sector investments. All the steel companies including Tata Steel, AMNS, JSPL and JSW have announced significant capex. Our appeal to the government is not to let it get derailed due to cheap imports and all the taxes.” he said.
Narendran’s comments comes even as steel companies are facing a double whammy of slowing exports and rise in imports. Tata Steel believes that the government should look at imports both from China and from South-East Asia. Some of the imports coming from Southeast Asia are basically Chinese exports to those countries and it is being rerouted to India, said Narendran. Tata Steel fears that unbridled cheap imports from China to derail the huge investment plans and hamper the recent capacity additions.
In FY 24, India imported 8.3 million tonne of finished steel, up 38.1 per cent from a year earlier. In the same period, steel exports increased only 11 per cent to 7.5 mt.
With lower exports, steel companies have diverted excess capacity into domestic market putting pressure on prices.
In a bid to protect its industry, US President Joe Biden has imposed a duty of 25 per cent on certain Chinese steel products. Last month, the US prevented China from circumventing its tariffs on steel and aluminium by routing it through Mexico and levied 25 per cent tariff on Mexican steel. Previously, that steel would have entered the country duty free.
Most of the imports from China are at a price where even the steel companies in that country lose money.
“If I am allowed to lose $50 a tonne on selling steel and still survive, then it is a different story. So in a market economy, you cannot make losses, keep producing steel and keep selling. This is what is happening in China,” he said.
It is not about competitiveness, that is a reality and that is why world over, Chinese steel are being looked at differently, he added.
“In India, where you have iron ore, vibrant market and people willing to invest to make steel, do not let it get derailed by imports coming in at predatory prices,” said Narendran.
