Unveiling the Impact of Trump’s Tariffs on Global Steel: An Exclusive Interview with JSL’s CFO
2024 has been a challenging year for Indian steelmakers as India’s finished steel imports from China reached an all-time high during the first eight months of FY25, and India became a net importer of steel during the period
Domestic demand: fueling growth for Indian steel in H2FY25
How is the domestic demand for stainless steel shaping up in the second half? What are the growth drivers and challenges? The domestic market has shown steady growth in the first half of FY25, and this momentum is expected to continue. Several sectors, including railways, industrial P&T, and lifts and elevators, are driving demand. Projects like Vande Bharat sleeper trains and Vande Metro are adopting higher-grade stainless steel, which is a positive shift for the industry. Emerging areas like small modular reactors (SMRs), ethanol blending under the E20 initiative, and large water projects, including dams and barrages, will also turn out to be good demand generators for stainless steel. The government also announced to spend INR 11.11 trillion on infrastructure in the financial year ending March 2025, which is expected to fuel demand.
However, challenges such as substandard imports from China and the need for safeguard, stricter implementation of BIS standards remain to develop the Indian stainless steel manufacturing ecosystem. Apart from this, we can expect demand from new-age areas such as aerospace, renewable energy, blue and green economy, to name a few.
Global export challenges: JSL diversifies markets amidst US & EU slump
Your export volumes fell by about 28% during H1 due to global challenges. With recent tariff announcements in the US, how will this affect steel imports to India? Global challenges, including weak demand in the US and EU, red sea crisis, west asia war, have affected exports. The proposed US tariffs are unlikely to significantly impact imports into India directly but may create ripple effects globally. Our focus remains on diversifying export markets, with regions like South America, Korea, Canada, Middle East etc showing potential.
Do you stick to the revised guidance of 10–15% volume growth? We are currently maintaining our guidance of 10–15% volume growth for FY25. While challenges such as global market turbulence due to Red Sea crisis, weak EU & US demands have affected volumes, our strategic focus on value added segments and operational efficiency helps us in partially mitigating these challenges to still deliver a good volume growth in the last two years.
How this will affect me:
As a consumer, you might see changes in the availability and pricing of steel products due to the fluctuations in imports and exports caused by global tariffs. This could impact industries that rely heavily on steel for manufacturing and construction, potentially affecting job opportunities and economic stability in certain regions.
How this will affect the world:
The imposition of tariffs on global steel trade can lead to disruptions in supply chains, increased tensions between countries, and a shift in global economic dynamics. It may also pave the way for countries to explore alternative markets and sources for steel, impacting the overall competitiveness and sustainability of the steel industry on a global scale.
Conclusion
Trump’s tariffs on global steel, particularly in relation to India, have the potential to reshape the steel industry landscape and affect various sectors and regions. The impact of these tariffs can be felt at both a local and global level, highlighting the interconnected nature of international trade and the importance of strategic decision-making in navigating challenges and opportunities in the steel market.
