Indian steel makers in a sweet spot on rising prices amid China supply curbs
For domestic steel manufacturers, the going has been good for a while now. Not only demand remains favourable, steel prices have also been north bound providing a supportive environment.
China, the largest consumer of the commodity, is facing supply curbs which bode well for demand and prices, globally. Limited exports out of China, as Beijing targets zero emissions over time, will lower the risks of cheap steel imports into India and will likely boost capacity utilisations across domestic steel manufacturers.
“Chinese supply restrictions and ex-China capital starvations have finally set the stage for capacity shortfalls in steel,” say analysts at Ambit Capital Private Limited. “The Chinese steel costs curve is likely to increase on supply restrictions, a higher share of EAF output (20% by CY25 from 12% in CY20) and higher power tariff.”