India's steel imports rise 58 percent in May

Steel imports to India rose to nearly 1 million tonnes, creating a difficult situation for domestic steel producers facing price pressures from cheap imports from countries such as China and South Korea.

On the other hand, the good news for the industry is that steel consumption rose 6.8 percent year on year to 7,230,000 tonnes in May 2015. Steel imports this month stood at 910,000 tons, up 58 percent on an annualized basis and 20.4 percent from April this year, according to the Joint Committee under the Ministry of Steel.

During the two months April-May 2015-2016 fiscal year, India's imports rose 54.5 percent to 1.67 million tonnes, compared with the corresponding period in 2014-15. Similarly, imports rose 71 percent to 9,320,000 tons in 2014-15 from 2013-14, making India a major importer of steel. According to the rating agency Moody's, steel imports are not expected to decline in the current fiscal year ending in March 2016.

Consumption of finished steel in India in total increased by 6.8 percent to 7,234,000 tons in May 2015 versus last year's period, up 31.3 percent from April 2015. Steel consumption also saw an increase of 7 percent in April-May in 2015-16 to 12,742,000 tons compared to the same period last year. Likewise, steel consumption rose 3.1 percent in 2014-15 to 7,636,000 tonnes compared to the same period in 2013-14.

Steel consumption in India is expected to grow by 6.2 percent to 80 million tonnes this year from 75.3 million tonnes in 2014, according to the World Steel Association. In addition, Moody's agency expects consumption to rise due to increased sales of consumer vehicles. The decline in prices for iron ore and coal, as well as the government's decision to resume mining, will help domestic steel producers and industries using steel.