ICRA Warns of Impact on Indian Steel Prices Due to Diverted Shipments
The Indian steel market may face significant pressure on local prices due to diverted shipments, according to a recent report by rating agency ICRA. This warning comes in the wake of the announcement by US President Donald Trump of a 25% tariff on steel and aluminium imports from all countries, effective from March 12.
ICRA’s report suggests that this new trade policy could have a dual impact on the domestic steel industry. Firstly, deliveries of about 4 million tonnes per annum (MTPA) of steel to the US from Asian suppliers, including Japan and South Korea, which had preferential access to the US market, may be redirected to high-growth markets like India. Both South Korea and Japan are among the top three steel exporters to India, contributing 40-55% of India’s finished and semi-finished steel imports. With these countries seeking alternative markets following the new tariffs, ICRA warns that India could experience increased import pressures, particularly in FY2026, due to existing free trade agreements (FTAs) with South Korea and Japan.
The report further highlights that such an influx of diverted steel imports could exert downward pressure on domestic steel prices, potentially impacting the earnings of India’s steel industry in the coming years. However, ICRA notes that China, which has a limited presence in the US steel market due to its steel exports already being subject to the 25% tariff, is less likely to contribute to this shift in trade flows. ICRA’s assessment underscores the potential challenges for India’s steel sector as global trade dynamics shift following the new US tariffs.
