China was the biggest buyer of Indian steel in the first six months of the current financial year, accounting for 29% of Indian steel exports during the period. The spurt in bilateral trade activity comes even as the armies of the two countries have been engaged in a face-off at the border in Ladakh since July.
China bought 1.9 million tonnes of India’s 6.5 million tonnes of steel exports during April-September, the highest in at least six years, a Reuters report said. The country had imported a mere 2,500 tonnes from India in the same six-month period last financial year. Vietnam was the second-largest importer of Indian steel, buying 1.6 million tonnes.
India’s steel exports during the period were mostly of hot-rolled coils, a flat steel product used to make pipes, automobile parts, and engineering and military equipment.
“Many Indian steelmakers exported vast quantities of semis to China last few months," an executive with an Indian private steelmaker told Mint. Semis are used to make finished steel.
The rise in steel exports to the world’s second-largest economy comes even as the Indian government has imposed curbs on imports from its neighbour. This includes imports of steel from China, the world’s largest producer and consumer of the alloy. India has also enhanced scrutiny of foreign investment coming from China.
India’s own steel consumption fell to its lowest in at least six years during April-September at 35.86 million tonnes, while finished steel production fell by a fourth to 38.6 million tonnes, according to the report. The fall in the two numbers is due to the lockdown imposed by the government on 22 March to contain the spread of the coronavirus.
The lockdown lasted at least three months in most parts of the country, leading to a slump in both production and consumption for most commodities.
The surge in China’s steel imports from India reflects the rapid recovery in the world’s most populous country after being the first to be hit by the virus. The Chinese economy expanded 3.2% in the June quarter from a year ago, according to a 19 October Bloomberg report. This was the strongest growth among the world’s major economies.
All other countries have seen their GDP contract in the face of the pandemic.
With the Indian government having restricted steel imports, particularly those from China, domestic factories have been humming. A 16 October report had pointed out that all major listed steel players had witnessed higher sales in the September quarter.