Chinese buyers snap up Indian steel, defying trade tensions

A worker cuts steel bars for a construction project in the Indian city of Amritsar. (AFP)
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Updated 30 August 2020

Chinese buyers snap up Indian steel, defying trade tensions

  • New Delhi afterwards tightened rules to restrict Chinese investment in India and initiated measures to curb its trade with Beijing

NEW DELHI/BEIJING: India’s steel exports more than doubled between April and July to hit their highest level in at least 6 years, boosted by a surge of Chinese buying in defiance of tensions between Beijing and New Delhi.

Traders said reduced prices had driven the purchases as Indian sellers sought to get rid of a surplus generated by the impact of COVID-19 on domestic demand and generate much-needed income.

It was unclear whether the sales broke any trade rules, but the China Iron and Steel Association said in a statement it was monitoring them.

Leading Indian steel companies Tata Steel and JSW Steel were among Indian companies that sold a total of 4.64 million tons of finished and semi-finished steel products on the world market between April and July.

That compared with 1.93 million tons shipped in the same period a year earlier, government data analyzed by Reuters showed.

Of the 4.64 million tons, Vietnam and China bought 1.37 and 1.3 million tons of steel respectively. The Chinese purchases are by far the largest since data was first collated in the current form beginning with the fiscal year April 2015-March 2016.

Neither Tata, JSW nor India’s federal ministries of steel and commerce responded to emails seeking comment.

Vietnam has been a regular buyer of Indian steel, but China’s emergence as a leading buyer, replacing New Delhi’s traditional markets, such as Italy and Belgium, is more surprising.

An already uneasy relationship between New Delhi and Beijing, became severely strained after violent border clashes in June.

New Delhi afterwards tightened rules to restrict Chinese investment in India and initiated measures to curb its trade with Beijing.

The politics are at odds with market realities.

Although China, the world’s leading steelmaker produces vast quantities, it needs imports as it ramps up infrastructure spending.

Two industry sources, asking not to be named because they are not authorized to talk to the media, said major Indian steelmakers offered a discount of at least $50 a ton, selling hot-rolled coils and billets to China at $430-$450 per ton against the $500 offered by most Chinese producers.

Hot-rolled coils, a flat steel product, are mostly used to make pipes, automobile parts, engineering and military equipment.

The China Iron and Steel Association official told Reuters it was paying particular attention to the imports of hot-rolled coils.

During the first four months of the 2020-21 fiscal year, China and Vietnam together bought close to 80 percent of India’s total hot-rolled coils exports, the data showed, while the product constituted more than 70 percent of India’s steel exports.

Ji Renjie, a general manager at China’s Ningbo Henghou Group said the company in May bought 30,000 tons of hot-rolled coils from India for July shipment and expected to take delivery of another cargo of a similar size in October.

“I mainly do iron ore trades and just bought several cargoes of hot-rolled coils this year due to rosy profit margins,” said Ji.

AM/NS India, the joint venture between ArcelorMittal and Nippon Steel, in an email also said China had been a big buyer, accounting for 35 percent of the approximately 0.5 million tons of hot-rolled coils it shipped between April and July.


Lebanon plunged into ‘deliberate depression’: World Bank

Updated 01 December 2020

Lebanon plunged into ‘deliberate depression’: World Bank

  • The fall 2020 edition of the Lebanon Economic Monitor predicted the economy will have contracted by 19.2 percent this year
  • Lebanon’s economy started collapsing last year as a result of years of corrupt practices and mismanagement

BEIRUT: Lebanon’s economy is sinking into a “deliberate depression,” the World Bank said Tuesday in a damning report stressing the authorities’ failure to tackle the crisis.
The fall 2020 edition of the Lebanon Economic Monitor predicted the economy will have contracted by 19.2 percent this year and projected a debt-to-GDP ratio of 194 percent next year.
“A year into Lebanon’s severe economic crisis, deliberate lack of effective policy action by authorities has subjected the economy to an arduous and prolonged depression,” a World Bank statement said.
Lebanon’s economy started collapsing last year as a result of years of corrupt practices and mismanagement.
The crisis was made worse by a nationwide wave of anti-government protests that paralyzed the country late last year and the Covid-19 pandemic this year.
The August 4 Beirut port blast, one of the largest non-nuclear explosions in history, brought the country to its knees and further fueled public distrust.
“Lebanon is suffering from a dangerous depletion of resources, including human capital, with brain drain becoming an increasingly desperate option,” the World Bank warned.
In 2020, Lebanon defaulted on its debt, banks imposed capital controls and inflation has reached triple-digit rates, dragging the country into its worst ever economic crisis.
Instead of taking emergency measures to rescue the economy, Lebanon’s political elite has continued to dither and bicker.
The previous government headed by Hassan Diab failed to adopt ambitious policies to tackle the crisis. It resigned under pressure over the blast nearly four months ago and a new cabinet has yet to be formed.
“Lack of political consensus on national priorities severely impedes Lebanon’s ability to implement long-term and visionary development policies,” said Saroj Kumar Jha, World Bank regional director.
He called for the quick formation of a new government capable of implementing short-term emergency measures and addressing long-term structural challenges.
“This is imperative to restore the confidence of the people of Lebanon,” he said.
An annual index compiled by Gallup that tracks people’s experience of stress and sadness said “no other country in the world saw negative experiences skyrocket across the board as much as Lebanon.”
The Negative Experience Index’s data was collected before the Beirut port blast, Lebanon’s worst ever peace time disaster.