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Steel Exports post healthy growth

Aug 17, 1999

According to a report in the Economic Times, Indian steel companies have been aggressive exporters of hot rolled coils (HR Coils) to the European markets. This has become possible mainly due to the better demand supply scenario and the firming up of prices in international markets. The domestic steel markets have been reeling under the pressure of excess supply, due to domestic production and high imports. With Indian companies exporting to international markets, the situation in the domestic markets is likely to improve. This will lead to a firming up of the prices for steel products in the domestic markets.

However, it must be mentioned that India has currently imposed floor prices on the import of steel products. Once these import barriers are diluted, the domestic markets will witness an inflow of possibly a large amount of steel imports into the country. This could adversely affect the current firmness in domestic steel prices.

The increase in exports will also suffer if importing countries were to retaliate to India's trade barriers by imposing import restrictions. This could dampen the sentiment in domestic markets and adversely affect the recent firmness in prices.

Persistence in the high growth of steel exports will go a long way in lifting the fortunes of the Indian steel industry, which is beginning to recover after international majors resorted to large scale dumping into Indian markets. However, all is not rosy yet and this jump in exports must be cautiously viewed.

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