the major property developer’s debt woes affect them as they do not cater to the Chinese market. Instead the companies in the South Asian nation are looking forward to clocking in record exports this fiscal year, according to industry executives.
“China is a large economy and the ripples of Evergrande will only be felt within China, not outside,” V.R. Sharma, the managing director of Jindal Steel and Power, said, adding that the prime market of Indian steelmakers comprises of South-East Asian countries like Malaysia, Indonesia, and Thailand, as well as Australia and West Asia. “This market is readily available to Indian companies,” he noted.
China is currently the world’s largest steel manufacturer, supplying for over half the global steel demand and 75 per cent of the global iron ore imports. However, now with many countries racing against the clock to minimise their greenhouse gas emissions, the Communist Superpower has also joined these efforts, looking to ultra-low emission levels by reducing crude steel production by 8.8 per cent to 21.7 million tonnes this year.
Accordingly, Indian steelmakers are looking to cash in on this opportunity, hoping to expand their supply to cater to increasing demand. “With China focusing on reducing carbon emissions, their capacity for making crude steel will be down. Instead of producing crude steel, they will buy 20 per cent semi-finished steel or products,” an official of a steel manufacturing company, told Mint business news, adding that this will enable Indian steel companies to expand their ambit to China’s customer countries.
“While subdued domestic demand during Q1FY22 was a factor behind the spurt in exports, China’s production curbs in H2CY21 and its accommodative policy for imports of semis and scrap are expected to keep India’s steel exports (finished steel and semis) at elevated levels. We expect net exports to rise at 8 million tonnes in FY22 compared to 6 million tonnes last fiscal year,” president and co-group head of corporate sector ratings at Icra Ltd, Priyesh Ruparelia, noted.
