15% tariff reduces finished steel exports by 50% in June

13 Jul 2022 , 02:02 PM

Following the imposition of a 15 % charge on exports of some steel products by the government in a bid to boost domestic supply and lower inflation, India’s exports of finished steel more than halved in June compared to the same month the year before.

According to statistics from the steel ministry gathered by SteelMint, Indian steelmakers exported 0.64 million tonnes of the alloy this month compared to 1.37 million tonnes in the same period the previous year. Compared to the previous month, the export was down 19%.

Starting on May 22, New Delhi imposed a 15 % levy on steel exports. Steel producers argued the tax rendered Indian steel uncompetitive on a global scale.

This occurs at a time when India has the chance to increase its exports of steel as China has reduced output. Another significant supplier, Ukraine, has struggled to maintain its supply ever since Russia invaded the nation. Since then, several nations have severed their connections with Russia, another significant supplier of steel.

The producers additionally asserted that a decline in Indian exports indicated that there was an excess of steel on the local market. In June 2021, around 16 % of the finished steel produced in India was exported. According to figures, this decreased to a little under 7 % in June of this year.

The export tariff placed pressure on steel prices even though the alloy’s domestic market prices had been reducing ever since they reached an all-time high in April. The benchmark price for a metric tonne of hot-rolled coil (HRC) steel has decreased to Rs 60,000—61,000 from a peak of Rs 78,800 in April.

Even though the additional levy rendered Indian steel exports uncompetitive internationally, the export in June was interestingly still sizable. According to those in the know, this was partially accomplished by steel producers providing steel with boron in addition to markets like Vietnam.