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Steel imports from Japan, South Korea surge
Why in the news ?
- A recently published government document showed that India is being hit by a wave of steel from producers in Japan and South Korea, as mills there redirect supply after U.S. President Donald Trump slapped an import duty on the alloy earlier this year.
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- During the first quarter of the fiscal year starting in April, India’s steel imports from South Korea rose 31% from a year earlier, while those from Japan climbed 30%.
- The flood of imports is so big that the government in New Delhi is considering measures to control imports, Minister told.
- Between April and June, India became a net importer of steel, with foreign supplies reaching 2.1 million tonnes, 15% higher than a year earlier, according to the note.
- With the increase, the South Asian nation has now passed the United States as South Korea’s third-largest market for steel.
- Under World Trade Organization rules, safeguards are temporary restrictions on imports of a product to protect a domestic industry.
- However, renewed government measures would take place despite India’s domestic steel industry being unable to meet the country’s demand for high-end steel products needed for railroads and structural steel used in construction projects.
- India’s imports of steel products used by railways rose to more than 18,000 tonnes during the April to June period compared with 500 tonnes a year earlier, the Steel Ministry note said.
- Imports of steel products used in construction more than doubled to nearly 22,000 tonnes during the same period, the note said.
- The United States imposed tariffs of 25% on steel and 10% on aluminium imports in March.
- South Korea was the fourth-biggest steel exporter to the U.S.
- Indian steel manufacturers are also impacted by the tariffs and the country will retaliate with duties on products from the United States that will take effect from September.
Steel industry in India
- India was the world’s third-largest steel producer in 2017.
- The growth in the Indian steel sector has been driven by domestic availability of raw materials such as iron ore and cost-effective labour.
- Consequently, the steel sector has been a major contributor to India’s manufacturing output.
- India is expected to overtake Japan to become the world's second largest steel producer soon, and has envisaged achieving 300 MT of annual steel production capacity by 2030.
- Steel consumption is expected to grow 5.7 per cent year-on-year to 92.1 MT in 2018.
Source
The Hindu, IBEF