World Steel Association, in its latest short range outlook, has projected global steel consumption to grow marginally by 1.3% in the current year. While the steel consumption in the developed economies would be growing at 0.7%, the emerging and developing economies have been slated to experience a 1.6% annual rise. Surprisingly the Chinese consumption has been projected flat. For the last 2-3 years, almost all the world agencies have been releasing forecasts on a stagnant and even depleting steel growth in China. GDP growth projections for China are also following the same trend. With consumption exceeding investment and light engineering and service sector having been projected to grow at a higher scale compared to manufacturing, a drop in GDP from the earlier 7.5% to 6.6% in the current year has been projected. All this has not yet come true. In the latest quarter, the Chinese economy has grown by 6.9%. In the middle of last year, China announced a big stimulus investment programme in infrastructure and the property market also showed an uptick. As a result, as crude steel production in China increased by 0.6% in 2016, the finished steel consumption in China rose by 1.3%. It is not difficult to perceive that had China actually followed the downhill journey as predicted by the expert analysts, the world economy last year would have suffered another jolt. Stimulus investment was needed by China in making the land locked provinces enjoy the economic benefits nearly at par with coastal provinces and generating fresh employment opportunities to avoid social unrest. Growth in domestic demand in China has made the domestic prices of HRC risen from $304\/t ex-works (Q235 5.5mm Shanghai, incld.17% VAT) in January\u201916 to $ 548 \/t ex-works in December\u201916. Correspondingly, the export prices of HRC (SS 400) by China rose from $273\/t fob Tianjin in January\u201916 to $ 518\/t in December\u201916. You May Also Want To Watch: [jwplayer XQgk1nfb] Domestic big players in steel had earned a reasonable EBITDA while the process of eliminating inefficient and polluting capacities that were a drag on finances of the lending banks continued as per plan. Chinese import of iron ore to maintain steel production was at a record 1,024 mt last year, thereby allowing the merchandise iron ore rate to rise from $ 51\/t cfr China in January\u201916 to $78\/t cfr China in December\u201916 and enabled a remunerative price regime for indigenous producers of iron ore concentrates. Although China imported 13 mt of coking coal in 2016, the global price of coking coal was more influenced by frequent instant floods and flash rains in Australian mines. Further, a downward trend in requirements from Japan was a dampener for seeking a hike in quarterly agreements of coking coal. Amid an all round subdued activities in steel industry in the last year, the frenzied pace of Chinese steel exports (reaching a record level of 110 mt in 2016) that has been priced at lower than the marginal costs and caused injury to the domestic players in USA, Mexico, Canada, Germany, France, India, Indonesia, Vietnam was responsible for many of these countries adopting stiff anti-dumping, safeguard and countervailing duties against Chinese exports. It has actually resulted in shrinking the traditional markets of HRC from the ambit of Chinese exporters at least for the next few years. The new government in USA is pledge bound to the electorate of enhancing industrial growth and creates employment and wealth. The unabated flow of Chinese exports to various countries, developed and emerging, has made them protective of national interests. Last year, China faced 31% of total AD\/CVD investigations filed in WTO. In the current year, therefore, if China carries out crude steel production almost at a flat rate as last year with planned closure of about 50mt of induction furnace capacities and exports dwindling because of the spate of trade measures against it, the domestic market must rise in tandem to prevent secular fall in domestic prices to maintain a reasonable level of profitability for the big players, most of whom are SOEs. Chinese banks would prefer this scenario as it would enable them to clean the balance sheets out of loan repayment. The global prices of iron ore on this new normal would prevail at an average $50-60\/t cfr China and coking coal at $140-150\/t fob Australia. From India\u2019s point of view also, this scenario is preferable. However, it may require the continuation of a fresh dose of stimulus investment in infrastructure in China and the government plausibly is ready for that.