Chinese Steel Price Rise Offers Relief to Indian Steel Makers
In October 2024, a report by Axis Securities highlighted a significant change in the steel market. Chinese hot-rolled coil (HRC) steel prices increased in September 2024, benefiting Indian steel companies. Previously, Indian HRC prices were 7-8% higher than Chinese prices, but now they are 3% lower, creating an import parity discount. This shift is expected to help Indian steelmakers stabilize domestic prices and compete with Chinese imports.
HRC, or hot-rolled coil, is steel rolled into coils at high temperatures, used in construction, automotive, and manufacturing industries. The price change offers relief to Indian steelmakers who faced price pressure recently.
In response to complaints from domestic steel companies, India began an anti-dumping investigation into Cold Rolled Non-Oriented Electrical Steel imports from China. POSCO Maharashtra Steel Pvt. Ltd. and CSCI Steel Corporation India Pvt. Ltd. filed an application, alleging that these imports are causing harm to the domestic industry. They requested an anti-dumping duty on such imports.
Despite the benefits of higher HRC prices, the impact of China’s economic stimulus on steel spreads may be limited due to rising raw material costs, such as iron ore and coal, which could offset profit gains.
Doubts Revealed
Chinese Steel Price Rise -: This means that the cost of steel in China has gone up. Steel is a strong metal used to make things like buildings and cars.
Indian Steel Makers -: These are companies in India that produce steel. They make steel products for use in construction, manufacturing, and other industries.
Hot-rolled coil (HRC) -: HRC is a type of steel that is made by rolling steel at high temperatures. It is used in making things like pipes and car parts.
Price Gap -: This refers to the difference in cost between two things. Here, it means the difference in steel prices between India and China.
Anti-dumping investigation -: This is when a country checks if another country is selling products at unfairly low prices. India is checking if China is selling steel too cheaply, which can hurt local businesses.
Raw material costs -: These are the costs of the basic materials needed to make steel, like iron ore and coal. If these costs go up, it can make it more expensive to produce steel.