China’s hampered Steel production shifts the markets of Europe and Latin America towards India

The quotations for Steel have increased post-pandemic as the demand improved drastically from various sectors. In contrast, supply disruption has constrained the demand-supply balance for metal producers. Additionally, the ongoing Russia-Ukraine situation has exacerbated the global Steel supply shortage for Steel manufacturers. Earlier this week, the rising fuel costs and soaring raw material prices primarily backed the Steel prices to reach an all-time high record. In China, the strict decarbonization and restriction due to Covid has impacted the Steel production and exports, creating a good momentum for domestic market players to participate in the growing global export opportunities. This week, lower demand for the furnished Steel products in China amidst raw weather conditions and the expectation of increased supplies with the lifting of the lockdown from the Steel hub of Tangshan drove down the spot market price of Chinese domestic Steel. Furthermore, a sharp spike in coking coal prices and futures market volatility pulled the Steel market sentiments. Such developments have collectively gyrated the market dynamics for Steel.

Additionally, production cuts in China and hampered onloading and offloading activities at major ports of China provoked the market players from Europe and Latin America to tend towards the Indian suppliers. However, Indian Steel demand is poised to grow due to the revival of the construction, infrastructure, and manufacturing sectors, thus ushering in India's new commodity and economic growth cycle. Since last month, significant Indian Steel players, primarily SAIL (Steel Authorities of India Limited), Shyam Metallics, TATA, and JSW (Jindal South West) Steel stock shares, have ascended by nearly 11%, 17.5%, 5.2%, and 14.3%. The market players expect high quarterly figures from Steel production businesses because Indian companies have a buffer metal stock. Market participants believe that the current situation is export-oriented for the Indian players as they perform at the lower end of the global Steel cost curve because of cheaper labor and iron ore prices than other countries.

As per ChemAnalyst, “The price trend of Steel is expected to grow in the upcoming season due to the anticipation about the improved inquires of Steel in the international market and the sentiments strengthened by the supply disruption caused due to the Ukraine war. Eventually, the sanctions levied on Russian raw materials and financial isolation kept the market sentiments for Steel high. However, several market experts believe that the market sentiments were consistently staggering, and the relaxation from the Chinese authorities was expected by the end of April.