Expectations were high that the Chinese economy
would rebound after the easing of covid restrictions. (AP)
Stagnant local demand in China, and its increased exports, could
pressure global prices
China’s stagnant steel demand and
rising exports despite the lifting of pandemic curbs could depress prices
worldwide, posing trouble for Indian steel exporters.
Expectations were
high that the Chinese economy would rebound after the easing of covid
restrictions, boosting global steel demand and prices. Being the largest
consumer of commodities, improved China demand can help support global steel
demand and prices at a time concerns of a recession in developed economies
remain high.
“In China, despite
financial indicators being better than expected, we await signs of demand
pick-up," said analysts at ICICI Securities.
China’s weak
domestic demand also comes as its steel production is rising, leading to higher
risks on exports and, thereby, pressure on global steel prices.
Nomura Research
suggested that China steel exports in February surged 70% from a year earlier,
the highest since 2017, while for the first two months of 2023, total exports
were up 49% from a year earlier and remained higher than the corresponding
period of 2018-2022. China’s steel production rose 5.6% year-on-year in the
first two months of 2023.