|
|
| |
|
|
China cuts steel exports to India - Mr Sushim Banerjee-2019 China(Guangzhou)Int’l Metal & Metallurgy Exhibitio
n-metal exhibition
8/29/2018 金属展-冶金展-钢铁展-steel expo-metal &metallurgy expo |
--------------------------------------------------------------------------------------------------------------- |
|
Mr Sushim Banerjee DG of INSDAG in his personal capacity wrote that during the first four months of the current fiscal the steel imports to India at 3.03 million tonne is 8.2% higher compared to the level of last year. While Korea and Japan have together exported 1.5 million tonne, nearly 50% of total imports at zero/near zero customs duty under RCEP agreement, China has exported 0.51 million tonne of steel to India during the period, a 17% of total steel imports by India. It is interesting to note that imports from Korea and Japan in the current year is 24% more compared to last year while imports from China is down by 22%. In totality India has turned into a net importer as exports at 2.47 million tonne is 19% lower than imports. Secondly, UAE has emerged as the fourth source of imports of semi-finished (MS carbon and Alloy) and melting scrap. Last year India imported 8.4 million tonne of steel which was 5.4% higher than FY17. From China it imported 1.9 million tonne of steel, a 23% share of total steel imports to India.
It is known that AD reference prices imposed against China and other countries in HR/CR by India are ineffective as the current global prices of HR/CR are much higher. Chinese export price of HRC SS 400 at USD 575 fob Tianjin is available at Mumbai including freight and customs duty nearly at a domestic price level. At the current global prices it is difficult to establish dumping and therefore AD procedures, however CVD can be set up on proof of government subsidies embedded in the export price. For steel products India has never gone for subsidy investigation in the exporting country primarily for lack of conclusive data.
Thus it appears that in the current context it is not China, but a few other countries like Korea, Japan and CIS countries that are appearing as the major import sources. This situation is likely to persist till the termination of the agreements. It was earlier envisaged that both South Korea and Japan, being the major steel exporters to USA would divert their exports from US to India after the imposition of 25% duty. And this has exactly what has happened in the first 4 months of the current fiscal. Further, as domestic ruling prices in China is higher compared to its export offer, it s seen that while China has decreased its steel exports in April-July’18 to India, its apparent consumption in the first few months of the current year is slated to move up by the end of the current year.
It has been stated that FAI is the single driver of Steel demand in China at 41% of GDP. The various stimulus measures announced and implemented by the Chinese government in building of urban infrastructures, property estates and expansion of Rail network had enhanced the role of FAI. A look at the Chinese provincial economic disparities would convince us the imperative need of investment in infrastructure in land locked regions of the country. Under a scenario of sustaining global prices, it can be concluded that Chinese steel producers would target domestic market and not eager to enhance exports and continue facing AD/CVD investigations. This scenario is favourable for India who needs to convince the government of keeping steel outside the purview of Regional Economic cooperation and partnership (RCEP) agreement with China.
The strengthening of domestic steel market in China displayed in higher prices compared to exports. The current price levels of iron ore ($71-75 band cfr China) and coking coal (premium grade $170-180 fob Australia) facilitate the survival of its own iron ore concentrate producers and maintain the viability of both iron ore and coking coal producers all over the world. Any sharp reduction in raw material prices also spells warning signals for steel prices as it had happened on earlier occasions.
China is in the process of restructuring the economy- a visible shift from heavy industry led mega infrastructure investment to growth in light engineering and service sector, a less steel intensive structural construction process. However for a balanced regional development which has been accepted as the focal point of development process, it is found that infrastructure investment would continue to feature the Chinese growth process and the result is seen in the growth of crude steel production (3% growth in FY18 and 6% growth in Jan-July’18) and corresponding growth in Apparent Steel Consumption of China. ‘
It must be appreciated that China has already eliminated around 120 million tonne of surplus steel capacity during 2016 and 2017 and is going to close around 30-40 million tonne steel capacity in 2018.
It is also observed that China is also creating special steel production capacity both in HR/CR/Coated products including Electrical steel.
It would further bring down the Chinese imports. The combined capacity of 449.2 million tonne (HR: 245 million tonne , CR: 82.4 million tonne , Plates: 80.6 million tonne , Coated: 34.8 million tonne , ESS: 6.4 million tonne ) is taking care of the domestic demand and leaving a surplus in these products which can either be exported or cater to the emerging demand in the coming years. For India the Chinese steel imports via the third countries (Vietnam and Taiwan) is surely a cause of concern and needs to be taken up in the appropriate forum.
Sustainability of Chinese market should facilitate growth of Indian steel industry in the coming years and avoid frequent fluctuations in the raw material prices.
金属展-冶金展-2019广州巨浪国际金属暨冶金工业展览会-亚洲最大金属冶金展-巨浪展览-2019
China(Guangzhou)Int’l Metal & Metallurgy Exhibition-metal exhibition
-metal exhibition Metal exhibition, Metal
expo, 2019 Metal exhibition, 2019 Metal expo, China Metal exhibition, China
Metal expo, steel exhibition, steel expo, 2019 steel exhibition, 2019 steel
expo, China steel exhibition, China steel expo
|
|
|
|
|
