Troubles in China may impact Indian steel sector: Assocham

Troubles in China may impact Indian steel sector: Assocham

Troubles in China may impact Indian steel sector: Assocham
The troubles in China are expected to spell disaster for the Indian steel industry as desperate Chinese manufacturers would aggressively dump their products abroad, industry body Assocham said today.

According to a study by the business chamber, steel shipments to India from China have registered a growth of 232 per cent.

"China has 400 million tonnes (MT) of surplus capacity against a demand of 741 MT, which is more than 50 per cent of its requirement," it said.

The excessive capacity in China is four times the total capacity of India and in 2014, steel exports from China were 93 MT in total, increasing by 50.5 per cent year-on-year, it added.

India's steel imports have risen by over 71 per cent in 2014-15 (compared to 2013-14) and the trade deficit only in terms of steel has widened by USD 3.66 billion, it said.

"Specifically, China's steel imports coming into India in 2014-15 surged by over 232 per cent and the trade deficit with China alone widened by USD 2.66 billion," the paper said.

India's imports of defective steel and seconds increased by 30 per cent in 2014-15. Such imports of HR (hot rolled) steel alone witnessed a sharp rise of 99 per cent along with CR (cold rolled) rising by 81 per cent, it pointed out.

"Further, with devaluation in yuan, the impact is being felt on Australian, Taiwanese and Japanese currencies as well. This would make Chinese exports cheaper creating more room for their surplus steel in growing markets like India," it has cautioned. Moreover, defective and second steel is being dumped into India to the detriment of our construction and health of people.

"Globally, countries which have become victims of surplus, cheap and non-standard steel from steel-surplus nations are seeking various kinds of trade remedial measures on steel imports mainly from China, Japan and Korea," Assocham Secretary General D S Rawat said.

There are over 400 trade actions taken across the world with majority focused on China. Every country has become a prey to China's unfair exports and have been taking safeguard, anti-dumping or CVD route to counter the surplus steel entry, he added.