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Steel prices in India have plunged to the lowest level in more than three years due to higher imports and subdued exports, according to data from commodities consultancy BigMint.

Local prices of hot rolled coils used in the manufacturing sector averaged 52,267 rupees ($622.62) per tonne in July, it said.

India, the world's second-biggest crude steel producer, turned a net importer in the fiscal year ended March 31, 2024. The trend continued with finished steel imports scaling a five-year high in April-May, according to provisional government data.

Increased imports from China and Vietnam into India, alongside Chinese supply in overseas markets, have made Indian exports uncompetitive in many regions, putting downward pressure on domestic prices, BigMint said.

"This combination of increased imports and reduced exports has significantly impacted the pricing dynamics in the Indian steel industry," it said in an email to Reuters.

The federal steel ministry has asked the trade ministry to investigate cheaper steel imports from China and Vietnam, Reuters reported last month.

Rapid economic growth and higher infrastructure spending have turned India into a lucrative market for Indian and global steel makers, particularly with steel demand slowing down in Europe and the United States.

Last week, Tata Steel's chief executive T. V. Narendran said he expected demand in India to pick up from October through March, driven by the construction sector, automobiles and railways, among others.

($1 = 83.9465 Indian rupees)