MUMBAI: Indian steelmakers could face a significant effect after US President Donald Trump imposed duties on steel imports to his Country. Earlier, it was expected that the effect would be minimal, as the Indian steel industry does not have major exposure to the US market. However, the US tariffs, coupled with retaliatory moves by the European Union (EU) and China, have the potential to hurt nascent recovery in the domestic steel industry by making it expensive for steelmakers to export their surplus.
Any decline in exports is likely to exert downward pressure on domestic steel prices. India’s steel demand has failed to keep up with the fast-growing domestic production. Consequently, companies have to ramp up exports.
But, they will face competition from steelmakers in South Korea, China, Japan, and the EU, which will scramble to capture new markets as selling to the US becomes more expensive.
In 2016-17, the top five Indian steelmakers — Tata Steel, JSW Steel, SAIL, Bhushan Steel, and Jindal Steel and Power — had exported Rs 229 billion of steel, a jump of 269 per cent over Rs 62 billion in 2015-16. JSW Steel topped the list in 2016-17, with exports worth Rs 101.5 billion - a fifth of its net sales (Rs 523 billion). Its exports were up 276 per cent over the previous year, against 42 per cent year-on-year standalone growth in net sales. Bhushan Steel was second on the list, exporting nearly a quarter of its output.