The Indian domestic steel market may face a glut of imported steel following the US Administration’s imposition of reciprocal tariffs from April 2 and also changes in global trade flows leading to a domestic price correction of around INR 3,000/mt ($34/mt), S&P Global Ratings said in a statement on Thursday, March 6.
Some offset may come from cheaper coking coal, another likely result of shifting trade barriers, the agency said, but added that the downside risks on steel prices are greater than the likely cost benefits on inputs, once the Trump Administration adopts a tariff regime based on “We will charge you as you charge us”.
Indian steel mills ship only around two percent of their annual production to the US.
With the US set to impose a 25 percent tariff on steel imports from all countries including India from March 12, exports to the US are becoming costly, diverting flows to other geographies. Hence, South Korea and Japan may divert more exports towards India, the agency said noting that these two countries have accounted for 15 percent of the 26 million mt of steel imported into the US each year.
The threat of higher imports comes while India is ramping up about 15 million mt of newly built steel capacity that was added during 2024 and sluggish steel prices could delay the full utilization of this capacity and may hinder expansion, S&P Global Ratings said.