India is set to overtake Japan this year as the largest importer of South Korean hot rolled coils (HRC) on active imports from POSCO (India) and stable demand for API grade HR coils.

South Korean HRC exports to India, falling under chapter 7208, were reported at 1.3 million tonnes (MnT) during January-November, 2019 whereas exports to Japan were reported at 1.2 MnT, according to data maintained by SteelMint, a sister concern of Steel360. HRC imports from Korea during the same period in the preceding year were reported at 1.18 MnT to India and 1.27 MnT to Japan respectively. Total HRC exports from South Korea in 2018 were reported at 7.9 MnT.

Experts attribute this increasing trend in imports to active imports made by POSCO India for its processing centre located in Maharashtra. According to SteelMint’s data, POSCO India imports accounted for over 40% (~580,000 MT) of total imports from South Korea during the January-November, 2019 period.

Steelmint also learnt from market sources that POSCO has a memorandum of understanding (MoU) with Essar Steel for supply of 1 MnT of HRCs. However, in 2019, POSCO sourced ~600,000 MT, against ~900,000 MT in 2018.

­Another factor supporting imports from South Korea is the Indian government’s ambitious project of creating a gas grid (~3,300-km long pipeline) connecting the northern region to the eastern part of India under the Pradhan Mantri Ganga Urja Yojna. Several tenders had been issued and awarded in the year 2019 by state-owned units.

It may be noted that HRC imports from South Korea do not attract an import duty under the free trade agreement (FTA) signed between the two countries.

India’s total HRC imports during the first 11 months of 2019 (January-November) were recorded at 8.13 MnT.