Posted on 17 May 2024
Vietnamese steelmakers have re-entered the Indian hot and cold rolled coil market, sources tell Kallanish. Last week, the Bureau of Indian Standards (BIS) granted a licence renewal to Vietnam-based steel major Formosa Ha Tinh Steel, which allows the company to trade in India.
An Indian market participant notes Formosa’s renewed BIS licence is set expire in December 2024. Another trader says Formosa’s BIS licence renewal is only for certain steel grades.
Sources note there are rumours fellow Vietnamese major Hoa Phat Steel will also soon be granted a BIS licence renewal.
Industry reaction to the re-entry of Vietnamese imported steel into the Indian market has been mixed.
“The Vietnamese steel firm getting a BIS licence could potentially further steel dumping into the country,” AMNS India director and vice president, sales & marketing, Ranjan Dhar, is quoted as saying by Mint.
However, a local trader notes the move is “good for the industry”. He reasons this will not allow local domestic players to have a monopoly in the market and prices will therefore remain stable. This will help with supply, as long as there is no oversupply.
Supply has been limited as Indian mills are undergoing annual maintenance shutdowns in the April-June quarter. Traders estimate between 300,000-1 million tonnes of product will be off the market during this period (see Kallanish passim).
Market participants note the delay in Vietnamese companies’ BIS renewals could be a tactic to slow down imports, and can be seen as a soft trade barrier.
India turned into a net finished steel importer in the fiscal year ending March 2024 (FY24), according to Joint Plant Committee (JPC) preliminary data. Finished steel imports rose by 38.2% year-on-year to 8.32 million tonnes. Exports grew 11.5% to 7.49mt.
As per Cybex data, Indian HRC imports fell for the third consecutive month, dropping by 19.9% month-on-month to 152,068t in April.
In October 2023, the Indian government mandated steel ministry approval for imports of steel under quality control orders (QCO) that had not been cleared by the BIS. In March 2024, the steel ministry issued an updated QCO for 145 iron and steel products, superseding the previous QCO, which covered 111 (see Kallanish passim).
In January, the Indian Steel Association called for the Indian government to implement safeguard measures, such as a 8-12% import duty applicable to all steel shipments, particularly those arriving from countries such as China. But the steel ministry said it is not likely to impose an import duty, citing higher-than-expected domestic demand.
Source:Kallanish
