India's finished steel imports outpaced exports in August as buyers continued to purchase overseas material for re-export given tighter domestic availability.
Inflows of finished steel rose by 8pc on the year to 721,100t, according to a report from the steel ministry based on provisional joint plant committee (JPC) data. Meanwhile, exports were 31pc higher on the year at 693,700t, making India a net steel importer in August.
India transitioned to a net steel exporter in the April 2025-March 2026 fiscal year, after two years as a net steel importer. But imports have started to gain momentum again despite safeguard duties. A major reason for this shift has been rising imports by steel consumers under the advance licence scheme, which allows for duty-free imports if the goods are processed and re-exported.
The August volumes were old bookings which have now arrived, but buyers are still interested in imports because domestic flat steel availability is tight and China did not increase export prices very sharply over the past few weeks, a pipemaker which imports Chinese-origin material said.
Finished steel prices across Asia-Pacific markets have risen lately because of increased coking coal costs. The Argus fob China hot-rolled coil (HRC) index rose from $494/t on 28 August to $501/t today. Chinese-origin HRC offers to India were last heard at about $550/t cfr.
In addition to higher coking coal costs, tighter domestic supply — because of mill maintenance work, robust exports and stronger demand from the automotive sector — has pushed Indian HRC prices to a four-year high. The Argus weekly Indian domestic HRC assessment for 2.5-4mm material hit 61,250 rupees/t ($642/t) ex-Mumbai, excluding goods and services tax, on 4 September, a 6pc increase compared with mid-August.
Domestic steel production has also been lagging demand in recent months — something which has also contributed to the increase in inflows, according to some industry participants. India's August finished steel production was largely unchanged on the year at 13.5mn t, while consumption rose by 4pc to 14.3mn t, according to ministry data.
Over April-August, the first five months of the fiscal year ending March 2027, India's finished steel production was 4pc higher on the year at 68mn t, while finished steel consumption grew at a faster rate of 7pc to reach 70mn t.
If major Indian mills carry out further sharp price increases, imports could soon become viable even with safeguard duties, market participants said.
Inflows of finished steel to India stood at 3.5mn t in April-August, a 30pc increase compared with the previous year. Exports rose by 34pc on the year during the same period to nearly 3mn t. The rise in exports has been underpinned by a sharp rise in HRC sales to the EU after the new EU import quotas opened on 1 July.
