China produces over half of global steel in April

Despite sanctions and trade remedial measures from all across the world, China has kept its steel output momentum intact, clocking more than half of global production in April after notching its second highest-ever production in March, forcing the Indian government to keep a watchful eye on the development.

“We are closely looking at the development. The industry is also apprehensive. They have made representations for the imposition of anti-dumping duty for imports from various countries, including China. If required, we will take measures within the parameters of our foreign trade policy,” a senior steel ministry official told FE. The official, however, found it not prudent to comment on whether the minimum import price (MIP), imposed in early February for six months, would continue beyond its scheduled expiry in July. The government had imposed MIP on 173 steel products in the range of $341 to $752 per tonne to protect the domestic industry from galloping imports from countries like China, Japan, Korea and Russia.

The 0.5% growth in Chinese production at 69.4 million tonnes (mt) in April, on top of a 2.9% growth in March at 70.65 mt, could have an immediate impact on the Indian steel producers such as Tata Steel, JSW Steel and SAIL in case the increased output, lacking domestic demand, goes to the export market, steel industry sources said. India produced 7.8 mt steel in April clocking a 3.9% growth. “As per the estimates of the World Steel Association, Chinese steel consumption is expected to decline by 4% in the current year. However, their production has been up for the last two months. This is a cause of concern for Indian steel makers because higher production in China can destabilise the steel market once again,” said JSW Steel’s commercial & marketing director Jayant Acharya.

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India has provided enough protection, in the form of minimum import price and anti-dumping duty on certain grades, to guard its domestic firms from imports at predatory prices from China and other surplus countries like Japan and Korea. These measures have started yielding results with imports to India having fallen by 15.5% in April over the corresponding month last year, data compiled by the Joint Plant Committee (JPC), under the steel ministry, showed. The government also started anti-dumping probes on HR and CR coils in April.

The MIP has also provided a breather to the domestic steel industry, which raised the prices of its products, in sync with the global trend, by $50-60 per tonne since the imposition of the MIP till the middle of the last month. A fresh surge in imports could destabilise the market once again.