(Reuters) – Indian steel mills are likely to see a sharp drop in prices after U.S. import tariffs come into effect and reshape global trade of the alloy, potentially redirecting a glut of supply into the South Asian country, S&P Global said in a note.
The agency estimated Indian steel may see a price correction of about 3,000 rupees ($34.52) per ton.
Local steelmakers have been battling a rising influx of discounted steel, with intake from China, South Korea and Japan hitting a record high in first 10 months of the current fiscal.
Steel prices in India had plunged to the lowest level in more than three years in August last year, with local prices of hot rolled coils then averaging 52,267 rupees per ton.
U.S. President Donald Trump’s 25% tariffs on steel and aluminium imports into the country come into effect on March 12, and the measures have triggered a global trade war.
“India’s steelmakers are caught up in rising geopolitical and trade tensions and that is creating more uncertainty in their outlooks,” S&P Global Ratings analyst Ayushman Bharati said.
The tariffs are making exports to the U.S. costly, and diverting flows to other geographies, S&P Global said.
India, which already gets 40% of its steel imports from Japan and South Korea, will likely see higher influx from the countries, once the tariffs are imposed, Bharati added.
Steel from Japan and South Korea account for 15% of total steel imports in the U.S.
India added about 15 million tonnes of steel capacity in 2024.
“Sluggish steel prices could delay the full utilization of this capacity and may hinder expansion,” Bharati said.
Increase in Chinese steel imports, which are sometimes as much as $70 per metric ton cheaper than domestic steel, has hit steel makers’ profits in the past year.
($1 = 86.9170 Indian rupees)
(Reporting by Manvi Pant in Bengaluru; Editing by Leroy Leo)
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