Indian steel market may become victim of diverted shipments putting pressure on local prices: ICRA
Rating agency ICRA in its latest report has said that Indian steel market may become a victim of diverted shipments putting pressure on local prices. ICRA’s statement comes after the US President Donald Trump announced a 25 per cent tax on steel and aluminium imports from all countries. The new tariffs will be imposed on March 12.
According to the report, the latest trade measures cut both ways for the domestic steel industry. First, deliveries of 4 MTPA to the US from Asian suppliers like Japan and South Korea, which till now had preferential market access, could be partly bounced-off to high-growth markets like India. It said that these two countries rank among the top three steel exporters to India, accounting for 40-55 per cent of India's overall finished and semis (finished) steel imports. It stated that given the duty-free access on account of the free trade agreements (FTA) with India, import pressures from South Korea and Japan could increase in FY2026 as they search for alternate markets.
The report further said this can exert pressure on domestic steel prices, pulling down the industry's earnings further in FY2026. Unlike South Korea and Japan, China has a limited presence in the US, as its steel exports are already exposed to the 25 per cent tariff. Therefore, it said redirection of trade flows from China remains less of a threat after the latest tariff announcement.
