The latest tariff measure will impact around 6-7 per cent of global steel trade flows, as they adjust to the shifting market dynamics over the coming months
The US typically imports 28-30 million tonnes of steel annually and this is almost a quarter of its demand. (Photo by Cole BURSTON / AFP)
Chennai: The higher tariffs imposed by the US would see global steel and aluminium prices coming down. While some of the global suppliers may push their metals into India, India also has an opportunity to tap in the US after a few key partners lose their preferential market access.
The US typically imports 28-30 million tonnes of steel annually and this is almost a quarter of its demand. Of this, 77-82 per cent is in the form of finished steel items, and the balance in the form of semis. The latest tariff measure will impact around 6-7 per cent of global steel trade flows, as they adjust to the shifting market dynamics over the coming months.
Deliveries of 4 million tonnes per annum of steel to the US from Asian suppliers like Japan and South Korea, who so far had preferential market access, could be partly bounced-off to high-growth markets like India. This can exert pressure on domestic steel prices, pulling down the industry’s earnings further in FY2026, finds ICRA.
The ending of the US’s preferential market access regime and bringing in a level playing field can potentially lead to displacement of high-cost suppliers like Canada, Brazil, the EU, and Mexico, with low-cost suppliers, especially from Asia. Around 19 mtpa of steel cargo enters the US from these high-cost countries.
This opens the possibility for Indian mills to participate in a portion of this large opportunity and raise their export footprint in the US, which has so far accounted for 2-3 per cent of India’s overall steel export basket.
Meanwhile, aluminium prices also are likely to come under pressure. The tariff announcement is likely to adversely impact the aluminium demand in the US. With China already facing challenges in reviving its economy, this could have a bearish impact on aluminium prices. In addition, dormant smelters in the US may resume operations, weighing on the prices.
The US typically imports 4.5-5 million tonnes of aluminium annually, which contributes 12 per cent to the global aluminium trade. With an import dependence of 84 per cent, the US will continue to import aluminium in the foreseeable future and the tariff is expected to drive a significant rise in the US regional premium. This is likely to push the aluminium prices higher in the US, negatively affecting industries like automotive and manufacturing.
With a uniform tariff applicable to all countries, Indian exporters have an opportunity to expand export footprint in the US market. However, the bearish trend expected in LME aluminium prices will negatively impact the margins of domestic entities in the near to medium term.
The US typically imports 28-30 million tonnes of steel annually and this is almost a quarter of its demand. Of this, 77-82 per cent is in the form of finished steel items, and the balance in the form of semis. The latest tariff measure will impact around 6-7 per cent of global steel trade flows, as they adjust to the shifting market dynamics over the coming months.
Deliveries of 4 million tonnes per annum of steel to the US from Asian suppliers like Japan and South Korea, who so far had preferential market access, could be partly bounced-off to high-growth markets like India. This can exert pressure on domestic steel prices, pulling down the industry’s earnings further in FY2026, finds ICRA.
The ending of the US’s preferential market access regime and bringing in a level playing field can potentially lead to displacement of high-cost suppliers like Canada, Brazil, the EU, and Mexico, with low-cost suppliers, especially from Asia. Around 19 mtpa of steel cargo enters the US from these high-cost countries.
This opens the possibility for Indian mills to participate in a portion of this large opportunity and raise their export footprint in the US, which has so far accounted for 2-3 per cent of India’s overall steel export basket.
Meanwhile, aluminium prices also are likely to come under pressure. The tariff announcement is likely to adversely impact the aluminium demand in the US. With China already facing challenges in reviving its economy, this could have a bearish impact on aluminium prices. In addition, dormant smelters in the US may resume operations, weighing on the prices.
The US typically imports 4.5-5 million tonnes of aluminium annually, which contributes 12 per cent to the global aluminium trade. With an import dependence of 84 per cent, the US will continue to import aluminium in the foreseeable future and the tariff is expected to drive a significant rise in the US regional premium. This is likely to push the aluminium prices higher in the US, negatively affecting industries like automotive and manufacturing.
With a uniform tariff applicable to all countries, Indian exporters have an opportunity to expand export footprint in the US market. However, the bearish trend expected in LME aluminium prices will negatively impact the margins of domestic entities in the near to medium term.
( Source : Deccan Chronicle )
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