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| Vietnamese steel |
As major developed countries such as the United States and the EU raise trade barriers through carbon regulations and tariff hikes, India, a leading global steel consumer, is intensifying discussions on steel import regulations.
According to local media, the Indian steel industry is increasingly concerned about the potential decline in overall profitability as imports of low-cost Vietnamese steel continue to rise.
In late May, contracts were signed to ship approximately 35,000 to 40,000 tons of hot-rolled coil (HRC) from Vietnam to India at prices ranging from $590 to $595 per ton. Industry experts noted that these prices were $24 to $36 per ton lower than those currently prevailing in India.
HRC is trading in India at approximately $646 to $658 per ton. All the HRC shipped to India have been certified by the Indian Bureau of Standards (BIS) and originate from Formosa Ha Tinh Steel Corporation in Vietnam.
T.V. Narendran, CEO of Tata Steel, noted, "Although the volume of Vietnamese steel imports is still relatively small, the growing number of consumers could put pressure on Indian steel companies to lower their prices.
Some industry insiders have expressed concern that the influx of Vietnamese steel could be an act of "dumping" aimed at eliminating excess domestic production, which could lead to a decline in profit margins.
Narendran stressed, "To promote the growth of the Indian steel industry, it is imperative to ban the import of steel at unfair prices."
In fiscal year 2024 (April 2023 to March 2024), India imported 8.3 million tons of steel, making it a net importer of steel.
Until fiscal year 2024, there were almost no imports of Vietnamese steel. However, about 1 million tons were imported in fiscal 2024. Vietnamese steel products benefit from tariff reductions under the India-ASEAN Free Trade Agreement signed in 2003.
Currently, more than 20 Vietnamese steel companies are undergoing the BIS certification process by the Indian government, with the Vietnamese government formally requesting expeditious processing.
Amidst the surge in imports of Vietnamese steel, there are growing concerns that imports from countries such as South Korea and Japan may also increase due to the recent extension of EU safeguard measures, which may change the supply orientation of steel companies in East Asia.
Indian steel companies have previously highlighted the increase in imports from East Asian countries. In May this year, they warned of the potential market impact of US tariff hikes on Chinese steel.
Alok Sahay, secretary general of the Indian Steel Association (ISA), noted, "Last year, the supply of steel from China and Japan had already increased," adding, "Since the Indian government has not taken any protective measures in the last two years, we are vulnerable to 'predatory' imports that could undermine our plans to increase steel production."
Some within the Indian steel industry argue that Indian companies should lower their prices to align with global trends and reduce the surge in steel imports.
However, there is a growing call among local steel industry stakeholders and government officials to strengthen quality and certification requirements, such as BIS certification, and to tighten import restrictions through measures such as tariffs and import quotas.
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