India’s finished steel purchases from China touched a six-year high in the first two months of the fiscal year beginning in April, according to provisional government data reviewed by Reuters, while its overall imports reached a three-year high.

In April and May, China emerged as the second-biggest steel exporter to India, selling 0.2 million metric tons of the alloy, up 62% from the same period a year earlier.

Imports from China accounted for a quarter of India’s finished steel imports during the period.

India imported 0.9 million metric tons of finished steel in April and May – the highest since 2021 – and up 27% from a year earlier, the data showed.

China, the world’s top steel producer, exported mostly cold-rolled coil or sheets to India.

Cold-rolled coil or sheets constituted the bulk of India’s imports in April and May, accounting for a 30% share in overall finished steel imports.

China is set to export the most steel this year since 2016, analysts said, as the weakening yuan and competitive prices help the world’s biggest producer offload surplus metal due to weak demand at home.

India’s federal steel ministry was considering imposing a countervailing duty on steel imports from China, Vivek Johri, chairman of the board of indirect taxes and customs, said last month.

During April-May, South Korea was the top exporter of finished steel to India, shipping out 0.4 million metric tons and accounting for 38% of India’s overall imports.

However, India, the world’s second-biggest crude steel producer, was a net exporter of finished steel in April-May, with 1.6 million metric tons sold to top buyers such as Italy, Spain, Belgium, Nepal, and the United Kingdom, the data showed.

In April-May, India’s finished steel exports to Italy surged to their highest level in six years.

India’s crude steel production stood at 22.4 million metric tons in April-May, up 6% from a year earlier.

Consumption of finished steel was 20.3 million metric tons, up 8% on the year and the highest in six years.

Reporting by Neha Arora; Editing by Mayank Bhardwaj and Kim Coghill

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