JSW Steel is in discussion with the government, seeking the introduction of certain trade measures to restrict steel imports from China and FTA (free trade agreement) countries, Chief Executive Officer Jayant Acharya told analysts in a post-earnings call on July 19.
"We are holding discussions with the government on various trade measures and expect it to take some steps soon. Trade barriers introduced by other countries are making India more vulnerable to the flow," Acahrya said.
The comments come as elevated imports pressured domestic steel prices, impacting earnings of the steelmaker even as raw material cost remained low. The steelmaker expects the prices to remain rangebound and not dip further in the coming quarters.
JSW Steel reported a 64 per centfall in net profit in the June quarter, hit by lower volumes, inventory losses and subdued exports. In a press statement, the company said that elevated imports pose a challenge to the domestic steel industry.
During the quarter, the domestic market saw an increased supply of the commodity, driven by a preference for cheaper import alternatives and need-based procurement. Thus, weak demand coupled with cheaper Chinese imports continued to weigh on the market, pressuring prices for domestic steelmakers.
According to reports, in 2023-24, India saw a significant increase in steel imports, reaching 8.3 million tonnes, which exceeded the country's exports of 7.5 million tonnes. Vietnam contributed to a tenth of these imports, ranking as the fourth-largest steel exporter to India, following South Korea, China, and Japan.
Separately, the steelmaker has also raised questions on the quality of imports amid flow of substandard quality products.
"Substandard products are still coming in and we are taking it up with the BIS (Bureau of Indian Standards) and the Consumer Affairs Ministry to tighten quality control norms," Acharya added.
Meanwhile, Indian mills are also facing a challenge in the export market as China has been targeting destinations that were key markets for Indian mills, such as Vietnam, Middle East, and Turkey, according to analytics firm BigMint.
Although JSW Steel's exports fell 51.1 percent QoQ and 35.8 percent YoY to 1.49 million tonnes, the company is bullish on the government's capex allocations in the coming quarters.
"Government capex is expected to recover in the coming quarters, supported by robust tax revenues and higher RBI dividend, providing fiscal flexibility. Rising capacity utilisation and healthy corporate and financial sector balance sheets are poised to boost private investment, particularly in manufacturing, energy transition, and real estate. A favourable monsoon will support the ongoing recovery in rural demand," the steelmaker added.
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