Steel prices in India have fallen to their lowest level in over three years, primarily due to increased imports and reduced exports, according to data from commodities consultancy BigMint. The average local price of hot rolled coils used in manufacturing was reported to be Rs 52,267 per tonne in July.

India, which is the world's second-largest producer of crude steel, became a net importer in the fiscal year that ended on March 31, 2024. This trend continued, with imports of finished steel reaching a five-year high during April-May, as indicated by provisional government data.

BigMint explained that the surge in imports from China and Vietnam, coupled with the Chinese supply in global markets, has rendered Indian exports less competitive in many regions, which has put downward pressure on domestic prices. The consultancy noted that this combination of increased imports and diminished exports has had a significant impact on the pricing dynamics within the Indian steel industry.

The federal steel ministry has reportedly requested the trade ministry to investigate the influx of cheaper steel imports from China and Vietnam.

Due to rapid economic growth and increased infrastructure spending, India has become an attractive market for both domestic and international steel producers, particularly as steel demand has slowed in Europe and the United States.

Last week, Tata Steel's chief executive, T V Narendran, anticipated that demand in India would rise from October to March, driven by sectors such as construction, automobiles, and railways.