Steel production growth in India slows down

In India, steel production increased 4.5% to 102.34 Mt in the 2017-18 fiscal year ended March 31, reflecting slower growth from a year earlier.

While steel output increased 8.5% in 2016-17 after higher anti-dumping duties on sheet steel products curbed imports and helped mills boost domestic sales. Slower growth in 2017-1918 could be largely the result of a higher base period a year earlier.

Total finished steel production in 2017-18 amounted to 104.98 million tons, which is 3% more than a year earlier. Production of rebar and wire rod increased by 2% to 36 million tonnes, while production of hot rolled steel decreased by 0.8 pp. up to 24 million tons.

Consumption of finished steel in India increased by 7.9%. in 2017-18 to 90.68 million tons, which is much higher than the 3% growth in 2016-17.

Infrastructure projects were the main driver of steel sales growth, but slowing demand for real estate led to a decrease in demand.

Steel demand from infrastructure projects is expected to remain robust in 2018-19, the last fiscal year ahead of the general elections scheduled for April or May 2019. This could lead to an increase in infrastructure costs for active voter voting.

Exports of finished steel to India increased 17% to 9.62 Mt in 2017-18. Italy was the largest buyer of Indian steel during this period, with purchases up 31% to 1.34 million tonnes. India is a major supplier of HRC to Vietnam, one of the largest importers in the world, but has not been able to compete with Chinese supplies over the past few months.

India's total finished steel imports rose 3.5% to 7.48 million tonnes in 2017-18. The largest supplier was South Korea, which increased shipments by 18% to 2.47 million tons, followed by China by 1.93 million tons, up 11% from the last fiscal year.