InvestorQ : Is it true that India has enjoyed bumper steel exports to China in the Jun-20 quarter and what has been the trigger?
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Is it true that India has enjoyed bumper steel exports to China in the Jun-20 quarter and what has been the trigger?

Answer
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Deepa Salunkhe answered.
2 months ago


It does sound a little ironical but at a time when India appears to be blocking all types of imports from China and even capital flows, China appears to be importing record quantities of steel from India. In fact, India’s steel exports to China doubled between April and July.

Lower steel prices and a major steel glut ensured that most Indian sellers sought to get rid of a surplus generated by the impact of COVID-19. There was a 4-5 million tons demand / supply gap each month and the steel companies needed to generate much-needed income.

Tata Steel and JSW Steel confirmed that they were among the Indian companies that sold a total of 4.64 million tonnes of finished and semi-finished steel products between April and July as compared to 1.93 million tons shipped in the previous year.

Now comes the interesting part. Out of the 4.64 million tons that India exported, Vietnam bought 1.37 MT while China bought 1.31 MT of steel. Vietnam has been a regular buyer of Indian steel, but China is now a bigger steel customer for India than Italy or Belgium.

These orders come in the midst of rising tensions as the Indian and Chinese armies face off nearly the Eastern and Northern borders. Indian authorities are trying to figure it out but Indian steel manufacturers are really not complaining in the face of this bonanza.

Interestingly, China produces 61% of the global steel but it still needs huge steel for its infrastructure needs. Most Indian producers were offering huge discounts to Chinese buyers and that had also resulted in a huge spurt in steel exports to China.