The abolition of the export duty on steel in India may increase the import of cheaper products to the domestic market of Turkiye
Steel companies in Turkiye fear an increase in the import of cheaper steel products from India into the country after the Indian authorities canceled the export duty on steel. Ekonomim reports about it.
Turkish steelmakers are worried about the lifting of tariffs by one of its biggest rivals, India, at a time when high energy costs are hampering the competitiveness of local steelmakers.
“After India abolished duties on exports of steel products, local producers were concerned about the possible aggressive entry of Indian steelmakers into the Turkish domestic market. In addition, competition between the two countries is expected to increase in other markets,” the report said.
Steel production in Turkiye in October 2022 decreased by 17.8% compared to October 2021 – to 2.9 million tons. The negative indicator reflects the increase in energy prices in the country, as well as low demand in Turkiye’s target markets due to fears of a recession.
At a time when rising costs continue to weigh on local producers, the removal of tariffs in India could further worsen the situation. The corresponding decision of the Indian authorities will probably put pressure on the prices of steel products in Turkiye, since Indian steelmakers are the largest suppliers of rolled steel to the Turkish market.
As GMK Center reported earlier, India introduced export duties on steel on May 22, 2022. Tariffs in the amount of 15% were applied to the export of pig iron, non-alloy flat hot-rolled and cold-rolled products, non-alloy coated products, rebar, etc.
Thus, in January-June 2022, Turkiye imported 495,000 tons of steel products from India, and only 43,000 tons after the tariffs came into force in the third quarter.
The Indian government has introduced tariffs to stabilize the market and prevent volatility. The restrictions were planned to be in place at least until the end of 2022, but they were cancelled on November 19, 2022, which caused premature concerns among Turkish steelmakers.
After cancellation of export customs tariffs, India is expected to increase steel supplies to the EU market and exhaust quotas faster. However, in the current situation of low demand, oversupply and low prices, the export orientation of Indian producers will put additional pressure on already weak global markets.