China’s real estate package stimulates Indian steel
Mumbai: Troubled Indian steelmakers are reaping the benefits of China’s stimulus package as the prices of Chinese-made steel surge above domestic levels for the first time in months.
Indian steel producers have been grappling with an onslaught of cheap imports from China.
Hot-rolled coil (HRC) from China is being quoted at a premium of ₹3,000 per tonne to the domestic prices, as per analysts at BigMint, a market intelligence firm. HRC is trading at around ₹48,500 per tonne in Mumbai.
This is on the back of improving sentiment in China after the government announced a stimulus for the real estate sector last month.
Also read | India plans ‘safeguard duty’ to protect steel companies from cheap imports
Until September, Chinese steel was selling at a discount to domestic prices, putting pressure on local steelmakers and dragging prices to nearly four-year lows.
The shift in the pricing dynamics could signal a potential reversal of the downward trend in Indian steel prices.
“The only thing preventing a price hike in the domestic market is an inventory build-up,” said Priyankar Biswas, associate director at BNP Paribas. However, he cautioned that the price movement is entirely based on sentiment, and China is yet to report any increase in domestic steel consumption.
Not just domestic prices, export prices may also improve for Indian steelmakers in the short term, he said.
India has been importing nearly 1 million tonnes of steel a month as compared with domestic production of around 12 million tonnes. Imports have surged since last year as India remains the only major market where steel demand is growing.
Read more | India’s steel prices plunge to four-year low, most affordable since covid-19
As per BigMint data, India’s steel imports in the first half of FY25 were about 5.1 million tonnes, 54% higher than the same period last year. During this period, China overtook South Korea as the leading steel exporter to India, as per an estimate from S&P.
Nearly half of the steel imports into India are from China. Indian steelmakers claim that the bulk of these imports are at predatory prices—meaning they are being dumped at a price lower than the cost of production.
Following complaints from local steelmakers, the government is planning to impose a safeguard duty on steel imports, Mint reported on Saturday.
The government is awaiting a formal duty proposal from the domestic industry, following which the Directorate General of Safeguards will investigate the matter and recommend if any duty is to be levied.
Also read | China’s real estate stimulus to aid Indian steelmakers but oversupply persists
India also began an anti-dumping investigation into HRC imports from Vietnam after a complaint from domestic manufacturers.
“Theoretically, the landed cost of Chinese HRC imports to India has risen by approximately ₹3,000 per tonne following the price hike after recent stimulus announcements,” a BigMint spokesperson said. However, some Chinese traders are quoting lower prices too, the spokesperson said.
