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[ferro-alloys.com]India produced 88.05 million mt of crude steel from April 2018 to January 2019, 3.5% higher year on year amid higher domestic consumption, latest provisional data from the country's Joint Plant Committee showed.

Overall consumption rose 7.8% year on year over the 10 months, according to the data.

Hot metal production amounted to 59.97 million mt over Apil-January, up 6.5% year on year, while pig iron production reached 5.01 million mt, achieving a 5.2% gain. India's financial year begins in April and ends in March.

In addition to the higher production, India's own production capacity has increased with the startup of new furnaces.

For instance, in May 2018, state-run Steel Authority of India Limited fired up the rebuilt No. 1 blast furnace at its Rourkela steel plant, boosting its production capacity to 1.015 million mt/year from 438,000 mt/year. The Rourkela plant now has production capacity of 4.2 million mt/year of crude steel versus 3.22 million mt/year previously.

Imports of finished steel over April-January reached 6.55 million mt, a 1.5% rise year on year, while exports tumbled 37.3% to 5.15 million mt.

"Even though imports seem low at 1.5% currently, with imports landing in February and March, the figure will definitely increase to 4%-5%," a source associated with the ministry of steel said.

"Exports, on the other hand, will increase since companies have been booking exports in January for February shipment. However, in my view they will decrease by around 30% year on year."

India's ministry of steel said in its January report that the country was a net importer of finished steel in April-January, noting that imports have mainly increased from Indonesia, Japan and South Korea.

"Due to various trade measures imposed by regions/countries such as [the] EU, Canada and others, the access to traditional markets for Indian exports have been restricted. Additionally, US-232 measures have distorted export flows to other markets," it said.

For calendar year 2018, the ministry said India's production of crude steel reached 106.5 million mt, "... which is a 4.9% increase over 2017 and has become the second largest steel producer globally."

A ministry source said the key issue is the quality of steel being produced in India instead of imports. It was highlighted that several domestic customers were raising their grievances in meetings related to India's Domestically Manufactured Iron and Steel Products, or DMI&SP, policy in government procurement.

The policy -- approved in 2017 -- makes it mandatory to buy domestically made steel for select government projects at a minimum of 15% of its total requirement. The policy applies to the supply of iron and steel products having an aggregated estimate value of Rupees 500 million ($7.01 million) or more. Industries such as the oil and gas industry are said to be highly demanding when it comes to the use of structural steel for its projects.

A mill source said end-users in the oil and gas segment have been encountering issues in inviting bids for their projects, however, the quality of Indian steel is not the concern. This is the transitional phase of the policy and both mills and customers should work together to resolve issues, he said.

(S&P Global Platts)

• [Editor:王可]