October 14, 2020
2 mins read

Demand in China boosts Indian steel industry

Good times seems to be making a return for Indian steel makers as global demand conditions, particularly in largest steel consuming market in China, has pushed up the metal prices worldwide.

The immediate impact of the development in China is that Indian steel prices have also firmed up and has shown consistent increase over last four months since July when unlock phases of the economy became more pronounced.

Steel trade data released by China suggests demand remains strong there with net steel exports declining to 10 year lows in September 2020. Moreover, high passenger car sales in September 20 20 confirm strong end user demand for steel in China. China’s domestic steel prices are also on the rise again post the National Holidays that ended last week.

“With strong steel demand supporting prices in China, we expect regional export prices to also remain strong, which should be beneficial for Indian steel prices,” Motilal Oswal said in a report.

India has already turned net exporter of steel to China for the first time in several years, with 69 per cent of semi-finished steel and 28% of finished steel heading there between April and August. The numbers have risen further in the months of September and October.

In China, net steel exports have declined to 0.94mt – a new 10-year low. Declining net steel exports despite rising steel production (up 4.7 per cent YoY over Jan-Sep’20) indicate strong steel consumption in China.

Moreover, China’s passenger car sales grew 8 per cent YoY to 2.09 million units in September 2020 (and by 7.8 per cent YoY in 3QCY20), indicating strong end-use demand for flat steel. The country’s iron ore imports also surged 9 per cent YoY to 108MT (8 per cent MoM) in September 2020, and inventories at ports rose 3 per cent MoM to 104.8MT.

All these are indicative of a boom coming back in the global steel market that should benefit Indian steel sector as well. Though India steel prices have moved up for past few months, there were concerns on demand conditions in China exerting downward pressure on prices.

Closer at home, steel companies have increase the price of the metal for the fourth month in a row in October on the back of demand revival and firm price trends in the overseas market.

Benchmark hot rolled coils (HRC) prices have increased by Rs 1,000-2,000 per tonne for October deliveries to Rs 43,000-43,500 per tonne whereas (cold rolled coil) CRC prices stand at Rs 52,000 per tonne.

The outlook is positive long steel products as construction activity in the country picks pace after monsoon.

Also Read: India’s Steel Exports To China Hit New Highs

Previous Story

Madame Feels Empowered To Begin 2021

Next Story

Sam Curran is our complete cricketer: Dhoni

Latest from Business

Northeast Is Growth Engine

Scindia also provided updates on the government’s efforts to facilitate the entry of SpaceX’s Starlink service into India. “All due diligence from the Ministry’s side is complete Union Minister for Communications and

India to Empower Global South

India is emerging as a pivotal force in the global transition to clean energy, with Union Minister for New and Renewable Energy, Pralhad Joshi, asserting that the country is empowering the Global

Maruti’s Global Push Breaks Record

June shipments hit 37,842 units, signalling robust global demand Maruti Suzuki India recorded its highest-ever monthly exports in June, shipping 37,842 units and marking a new milestone that highlights the company’s expanding

India Bats for Fairer Global Finance: FM Sitharaman

FM Sitharaman stated that we believe that optimal regulation fosters innovation and stability….reports Asian Lite News India supports reforms to the international financial architecture to enhance inclusivity and equity, including Multilateral Development

EVs Drive Cleaner Cities

Each EV is equipped with GPS tracking for real-time monitoring and efficiently serves the city’s 159.46 square kilometre area The use of electric vehicles (EVs) in household waste collection is ushering in
Go toTop