• Shipments slump 41% from year earlier as taxes cut purchases
  • India to continue to import less steel if floor price kept

Steel imports by India plunged to the lowest level in at least 14 months after the government imposed restrictions to stop purchases of cheaper overseas supplies.

Inbound shipments declined to 546,000 metric tons in May from 924,000 tons a year earlier, according to provisional data from the Steel Ministry. Imports fell 29 percent to 1.2 million tons in the first two months of the financial year started April. Monthly data on the ministry’s website start in April last year.

Imports are sliding in the world’s third-biggest steel producer after the government imposed a floor price through August and levied safeguard duties until 2018 to curb record inflows that hurt domestic makers including Tata Steel Ltd. Exports by China, which supplies half the world’s steel, surged to an all-time high last year, swelling a global glut.

“Major steel companies have been adding capacities, so the availability of steel in India is going up by the domestic producers and at the same time the minimum import price is giving protection,” Goutam Chakraborty, an analyst at Emkay Global Financial Services, said by phone from Mumbai. “If the minimum import price continues beyond August, this trend of lower imports will remain.”

The price floor has offered some relief to the domestic industry and consumption is seen rising about 6 percent this fiscal year, Seshagiri Rao, group chief financial officer at JSW Steel Ltd., said May 18. The growing market makes India attractive for countries with surpluses and the industry needs swifter trade measures with a longer shelf-life to curb imports, he said.

Production expanded 2.4 percent to almost 16 million tons in the two months through May from a year earlier, while demand increased 4.5 percent to 13.3 million tons, the ministry said.

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