ICRA: Competition Between Steelmakers to Intensify

SEATTLE (Scrap Monster): ICRA- the ratings agency foresees intensified global competition between Indian and steelmakers and subdued steel demand in China- the largest steel consumer in the world.

The property market, which has been a key growth engine of steel demand growth in China over the past two decades, is currently undergoing a rebalancing act. This may lead to extended period of weak steel demand in the country. This in turn could lead to increased steel exports from China, ICRA noted. As per estimates, the Chinese property sector accounts for around 15% of the global steel demand and approximately 30% of the total Chinese domestic steel demand.

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At the same time, China has been the single largest export market of steel from India. A dip in Chinese steel demand could badly impact the share of steel exports to China. Incidentally, the share of exports has dipped to 8% during the H1 this fiscal, compared with 30% in the same period last fiscal.

The anticipated drop in Chinese domestic steel demand coupled with depleted demand for Indian steel in Chinese market would see steel from both these countries competing in global markets.