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New Trade Measures Drive Price Adjustments
Indian steel producers are moving to raise domestic prices following the government’s proposal to impose a 12% safeguard duty on certain flat steel imports. The Directorate General of Trade Remedies (DGTR) recommended the temporary measure, which, if approved by the Ministry of Finance, would be in effect for 200 days. The duty would cover hot rolled coils, sheets, and plates, along with downstream products such as cold rolled coil, metallic coated sheets, and color-coated coils.
Targeted Import Restrictions and Market Impacts
The safeguard duty applies to imports from developed nations while excluding most developing countries, except for China and Vietnam. Additionally, Chinese steel imports already face an existing 7.5% antidumping duty.
Indian steelmakers had lobbied for stronger trade protection, arguing that surging steel imports threaten domestic manufacturers. In 2024, finished steel imports into India increased by 19.3% year-on-year, with hot rolled sheet and strip imports jumping 30.2% to over 4.5 million tonnes. A significant portion of these imports came from East Asian nations:
- South Korea: Up 10% to 1.53 million tonnes
- Japan: Up 143% to 1.31 million tonnes
- China: Up 124% to 0.98 million tonnes
While the DGTR’s proposed measures aim to curb excessive imports, they introduce potential cost burdens for Indian industries reliant on steel supply, limiting alternative sourcing options.
Market Reaction and Future Outlook
Since the DGTR investigation began, Indian steel buyers have been hesitant to procure imported materials, shifting focus to domestic supplies. Indian mills are prioritizing local sales, leading to longer shipment times for international buyers, particularly in Europe.
Domestic producers have already started raising prices in response to the expected duties, with further increases projected. If the safeguard measures take effect, Indian steel buyers anticipate a price hike of at least INR5,000 per tonne. However, the timing of implementation could coincide with the monsoon season, a traditionally slow period for steel demand.
Meanwhile, Indian credit rating agency ICRA forecasts that steel imports could decline by 50% in the 2026 financial year if the duty is enforced. As the market adjusts to these regulatory shifts, Indian steelmakers seek to capitalize on the country’s 6.4% GDP growth forecast for 2025, driven by infrastructure expansion and construction development.
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