Rise of China and Vietnam’s Share in India’s Steel Import Basket in June 2023
According to the statistics, the UK, Mexico, Russia, Italy, Portugal, and Nepal had a more significant percentage of India’s steel exports in June 2023.
According to official data, the proportion of nations like China and Vietnam in India’s 4.84 LMT steel import basket during June 2023 grew yearly (y-o-y). According to the Ministry of Steel, India’s total import of steel increased by 7.6 per cent over June 2022 and 5.9 per cent month over month to 4.84 lakh metric tonnes (LMT).
According to the report, “China, Japan, Vietnam, Saudi Arabia, Russia, Nepal, and the USA increased their share in India’s overall steel imports in June ’23 compared to June 22.
Vietnamese imports were 1%, while those from China were 26.1% in June 2022. In contrast, Vietnam’s share of India’s steel imports in June 2023 was 4.8%, and the import from China was 37.1%.
The accomplishment is noteworthy in light of India’s ambitious goal to raise its steel production capacity to 300 million tonnes and Indian businesses’ pursuit of a sizeable market share in the world’s steel markets.
India’s export of completed steel decreased to 5.02 LMT in June, a decrease of 27.6% over May 2023 and 21.3% over June 2022.
In June 2023, the UK, Mexico, Russia, Italy, Portugal, and Nepal had a more significant percentage of India’s total steel exports.
Regarding iron ore prices, it was reported that they remained steady from their May 2023 level in June at Rs 3,900/tonne.
June 2023 marked a significant shift in India’s steel import basket, with China and Vietnam emerging as leading suppliers. Official data has shed light on this trend, demonstrating how these Asian countries have increasingly solidified their positions as major stakeholders in India’s steel market.
Historically, India’s steel import basket has been diversified, with significant contributions from numerous countries, including Japan, South Korea, and Russia. However, recent statistics from June 2023 reveal a substantial increase in the percentage of steel imports from China and Vietnam, reshaping the dynamics of the steel trade in the region.
The data shows that China and Vietnam’s combined share of India’s steel imports have risen to 45%, up from 28% in the same month the previous year. This dramatic increase reflects the successful competitive strategies of these nations in the steel sector, with their production capabilities and strategic pricing gaining traction in the Indian market.
Several factors are contributing to this shift in India’s steel import basket.
First, China’s massive production capacity has led to an excess steel supply and decreased prices. This surplus and competitive pricing have attracted Indian importers looking to save on costs.
Vietnam, on the other hand, has made strides in improving the quality of its steel products. Over the past few years, the country has seen significant investment in its steel industry, leading to technological advancements and enhanced production methods. This development has enabled Vietnam to produce high-quality steel competitively, making it an appealing option for Indian importers.
The rise of China and Vietnam’s share in India’s steel import basket has implications for the domestic steel industry. The influx of cheaper, high-quality steel might stimulate competition, potentially leading to price wars and a margin squeeze for domestic steel manufacturers. However, it could also drive innovation and efficiency within the Indian steel industry as manufacturers strive to match imported steel’s quality and price points.
Conversely, for sectors that rely heavily on steel, such as construction and automobile manufacturing, cost-effective, high-quality steel might boost productivity and reduce costs, contributing to overall economic growth.
The Indian government has closely monitored this shift in steel import dynamics. While increased imports from China and Vietnam may be advantageous for specific sectors, there is also concern about the potential impact on domestic manufacturers. Therefore, the government is contemplating measures to safeguard the domestic steel industry, including implementing anti-dumping duties or increasing import tariffs.
The marked increase in China and Vietnam’s share in India’s steel import basket in June 2023 signifies a regional steel trade dynamics change. It indicates the shifting power centres within the steel industry, with China’s overcapacity and Vietnam’s enhanced production quality capturing significant market share.
Moving forward, it remains to be seen how this trend will evolve and what actions the Indian government might take to balance the interests of various stakeholders. Regardless, these developments underscore the importance of continually monitoring international trade patterns, as shifts can have far-reaching implications for domestic industries and the broader economy.
