The decision by the United States (U.S.) to impose a flat 25% tariff on steel imports from March 12, 2025, compared with multiple types of lower levies previously, will unlikely to have any impact on India steel companies said Sehul Bhatt, Director- Research, Crisil Intelligence.
“The move will have a threefold impact. One, it will lower the exports of its trade partners as local production rises, but India is unlikely to be impacted materially because only 2% of its total finished steel exports in the first 9 months of this fiscal were to the U.S.,” Mr. Bhatt said.
“Two, there will be a diversion of exporter inventory to other importer-nations at aggressive prices, especially in a milieu of increasing global competition. This could bring down the prices of steel in India, already trending at 4-year lows, further. That means the Indian government may have to step in with safeguard duty to support domestic capacities. The timing and quantum of this will be crucial,” he said.
“Three, incremental production by U.S. mills will mean a reduction in the steel scrap available for exports. That is because, as much as 70% of the steel industry there uses the electric arc furnace process, which typically involves converting scrap to produce steel. At present, India sources 14-15% of its scrap requirements from the U.S.,” he added.
Published – February 18, 2025 10:42 pm IST
