China could be routing
cheaper steel into India through South East countries which can derail the
investments made by Indian steel industry, T V Narendran, Managing
Director, Tata Steel told businessline.
“The Indian steel industry has been a good
example of private sector investments. All the steel companies including Tata
Steel, AMNS, JSPL and JSW have announced significant capex. Our appeal to the government is not to let it get derailed due to
cheap imports and all the taxes.” he said.
Narendran’s comments come even as steel companies
are facing a double whammy of slowing exports and rise in imports. Tata Steel believes that the government should
look at imports both from China and from South-East Asia. Some of the imports
coming from Southeast Asia are basically Chinese exports to those countries and
it is being rerouted to India, said Narendran. Tata Steel fears that unbridled
cheap imports from China to derail the huge investment plans and hamper the
recent capacity additions.
In FY 24, India
imported 8.3 million tonne of finished steel, up 38.1 per cent from a year
earlier. In the same period, steel exports increased only 11 per cent to 7.5
mt. With lower exports, steel companies
have diverted excess capacity into domestic market putting pressure on prices.
In a bid to protect
its industry, US President Joe Biden has imposed a duty of 25 per cent on
certain Chinese steel products. Last month, the US prevented China from
circumventing its tariffs on steel and aluminium by routing it through Mexico
and levied 25 per cent tariff on Mexican steel. Previously, that steel would
have entered the country duty free.
Most of the imports
from China are at a price where even the steel companies in that country lose
money.
“If I am allowed to lose $50 a tonne on selling
steel and still survive, then it is a different story. So in a market economy,
you cannot make losses, keep producing steel and keep selling. This is what is
happening in China,” he said.
It is not about
competitiveness, that is a reality and that is why world over, Chinese steel
are being looked at differently, he added.
“In India, where you have iron ore, vibrant market
and people willing to invest to make steel, do not let it get derailed by
imports coming in at predatory prices,” said Narendran.