The onward march of an “aggressive” China, the world’s biggest supplier and consumer of steel, has virtually come to a halt in recent times due to a variety of reasons, but India’s steel sector has picked up speed, both in steel output and demand.
A fresh report by Moody’s Investors Services said demand in India is set to outstrip the region’s average. It said the need for steel in India would outpace the regional average as the country’s GDP growth of around 7.5% in 2016 and 2017 was the highest in Asia.
As reported by MetalMiner, China’s steel production was predicted to contract this year and shrink even further in 2017. Li Xinchuang, Vice-chairman at the China Iron & Steel Association explained that was due to a drop in local demand.
So when the red dragon’s huffing and puffing, what’s added speed to the elephant?
- India’s reform and policy support for infrastructure and manufacturing, as well as increasing urbanization is driving steel consumption.
- The Indian government’s protectionist measures over the last two years like anti-dumping tax are bearing fruit.
- Recent commissioning of capacities by big producers such as Steel Authority of India Limited, JSW Steel and Tata Steel.
Moody’s said the profitability of Indian steel companies such as Tata would outperform that of regional peers owing to increasing domestic demand and measures like minimum import prices. Read more