Mumbai: India is set to become a net exporter of steel for the first time in four years, reversing a trend that saw domestic mills battling a flood of cheap imports, according to the Indian Steel Association. Shares of producers surged in Mumbai.

“This is a very positive development and it would indicate that the Indian steel industry is globally competitive in terms of quality and prices," Sanak Mishra, the association’s secretary general, said by phone from New Delhi. The nation’s production is forecast to top 100 million metric tonnes in the fiscal year starting 1 April as the big producers commission more capacity and look to boost exports, he said.

Lured by a rebound in global product prices, mills including JSW Steel Ltd. and Steel Authority of India Ltd. are relying on the export market to soak up excess inventories after boosting output in anticipation of Prime Minister Narendra Modi’s infrastructure push.

“India is exporting so much steel purely because of poor demand in the domestic markets," Goutam Chakraborty, an analyst at brokerage Emkay Global Financial Services Ltd., said by phone. Indian companies are benefiting from some trade barriers against China, he said.

Exports surged almost 78% in the 11 months to February to 6.6 million tonnes, while imports have plunged 39% to the same figure, according to Steel Ministry data. Output jumped 11% to 92 million tonnes amid consumption growth of 3.4% to 76.2 million tonnes, it said.

Sail shares rose 5.91% to Rs63.60 at 4:21pm in Mumbai, while JSW Steel climbed 5.02% to Rs192.30 and Tata Steel advanced 4.30% to Rs499.15.

Top producer Sail aims to double exports next fiscal year, the company said 1 March. It exported 682,000 tonnes in the April-February period, with shipments last month climbing to the best in a decade. Exports from JSW Steel, the second-biggest mill, have been as much as 26% of sales in the July-December period, according to the Mumbai-based producer.

It’s a sharp contrast to a year ago, when India was inundated with cheap supplies from China, the biggest producer and exporter, with the country importing a record 11.7 million tonnes in 2015-16. The government initiated a number of trade measures such as a floor price on shipments, safeguard taxes and anti-dumping duties to stem the inflow.

The nation is expected to have balanced imports and exports this year, said Mishra. India remains a key steel consuming country and the local market, which is forecast to grow at 5% next year, will still be the main destination for its producers, he said. He didn’t provide specific forecasts for 2017-18. Bloomberg

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