India will become a net exporter of steel to China; U.S. Stainless Steel Production Set to Increase 16% – Steel, Aluminum, Copper, Stainless Steel, Rare Earths, Metal Prices, Forecast


Reports indicate that India is poised to become a net exporter of steel to China, but will be overtaken by Indonesia as the world’s second largest producer of stainless steel.

A new report from a financial ratings firm has predicted that, on current trends, India will become a net exporter of steel to China this fiscal year.

According to the “Steel Industry: Trends & Prospects” report recently released by Infomerics Valuation and Rating Pvt Ltd., India’s exports for the current fiscal year could surpass those of fiscal year 2021.

This comes despite India being hit by the COVID-19 pandemic and existing border tensions with China.

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Indonesia will overtake India in the production of stainless steel; Increase in the production of stainless steel in the United States

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But the positive export news could be dampened somewhat by another forecast.

Indonesia could replace India as the world’s second largest producer of stainless steel, according to British research institute MEPS.

According to the institute, India’s No. 2 position is ‘under threat’. MEPS forecasts global stainless steel production of 56.5 million tonnes in 2021, marking an 11% year-over-year growth. Meanwhile, for 2022, it forecasts production of 58.2 million tonnes in 2022, up 2.5% year-on-year.

“Indonesian production expansion is expected to continue to outpace that of India,” the MEPS added. “However, increases in other regions are expected to be modest. This will bring little comfort to buyers who are dealing with national shortages and soaring prices.”

The research institute said Indonesia is likely to overtake India as the second-largest stainless steel producer this year with output of 4.5 million tonnes.

Meanwhile, in China, power rationing and turmoil in the real estate sector continue to affect production and consumption levels.

“In China, government guidelines to restrict smelting activity, introduced in the first six months of 2021, were subsequently enforced more strictly,” MEPS reported. “Electricity rationing in October, caused by coal shortages, further reduced production. In addition, the crisis of the Chinese real estate company Evergrande negatively affects steel consumption in the construction sector.

Increase in the production of stainless steel in the United States

In the United States, MEPS forecasts stainless steel production of 2.5 million tonnes, up 16% year-on-year.

However, buyers who have difficulty obtaining stainless steel will likely continue to face challenges next year (as we reported in Monthly Metal Outlook and Stainless MMI).

“However, the annual result is unlikely to return to pre-pandemic levels in 2022,” the MEPS said. “Stainless steel shortages, particularly of cold-rolled coils, are likely to be a feature of the domestic market in the near term.”

More than two-thirds of the world’s nickel production is destined for the production of stainless steel. The price of nickel on the LME soared in late November to over $21,000 per metric ton, but has since retreated. Three-month LME nickel closed Monday at $19,660 per metric ton.

Growth and Challenges of Steel in India

Steel is at the heart of India’s growth.

India’s steel sector contributes around 1.5% of its GDP. The country is the third largest steel tube manufacturing center in the world. Steel pipes account for 8-10% of steel consumption.

While China’s steel production has contracted throughout this year, India’s has increased over the same period. The Indian government has launched programs to facilitate smooth production and support the steel industry. The National Steel Policy (NSP) of 2017, for example, aimed to accelerate the development of the industry to reach global benchmarks. Eastern India, for example, has the potential to add more than 75% of India’s additional steel capacity. Of the country’s targeted 300 MT capacity by 2030-31, more than 200 MT could come from this region, Infomerics said.

The Infomerics report also cites optimism for the Indian steel industry due to the country’s low per capita steel consumption. A recovery in infrastructure construction, as well as the development of the automotive and rail sectors, will boost steel consumption.

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