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China's steel exports a concern for India; Tata Steel TV Narendran
Industry News- Sep 13,24
China, which produced 54% of the world’s crude steel in 2023, has been increasing its steel exports amid a slowdown in domestic demand, particularly due to challenges in its real estate sector.
TV Narendran, CEO and MD, Tata Steel has raised concerns about the influx of cheap Chinese steel into India, warning that India should not allow China to "export their problems" and urging the government to take action. According to Narendran, Chinese steelmakers are selling steel at a loss, which is impacting global markets, including India's.
"This is a problem we faced in 2015, and it is happening again. China is selling steel at a price where even they are losing money, and other countries are taking steps to address this issue. India should certainly consider taking action as well," Narendran said in an interview with CNBC-TV18.
His remarks reflect growing concerns within India's steel industry. Sajjan Jindal, MD of JSW Group, and Naveen Jindal, chairman of JSPL, have both highlighted the negative impact of rising Chinese imports on domestic margins. Recently, India’s Minister of Heavy Industries, HD Kumaraswamy, also expressed support for raising tariffs on Chinese steel imports, potentially increasing duties from the current 7.5% to over 12%.
Narendran emphasised that India, which is rich in iron ore, should not need to import steel but should focus on exporting it. He stressed the importance of balancing steel prices to ensure domestic manufacturers can maintain a 15-20% EBITDA margin, crucial for reinvesting in new capacities.
China, which produced 54% of the world’s crude steel in 2023, has been increasing its steel exports amid a slowdown in domestic demand, particularly due to challenges in its real estate sector. This has led to an excess supply in the iron ore market, further pressuring global steel prices.
While India's steel demand remains strong, driven by economic growth, domestic steelmakers are struggling to export due to weak international prices, which have fallen significantly this year.
(moneycontrol)
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