Indian Steel Mills Have Benefited Only Modestly From China's Energy Crisis
The benefits to Indian mills of higher Chinese steel prices resulting from curbs on Chinese production and/or higher energy costs will be limited on account of high logistics costsand challenges such as container shortages. So says India Ratings &Research (Ind-Ra).
"The [environmentalpolicy-driven] fall in China's steel output and India's imports of intermediatesteel products would benefit Indian steel players by way of lower import risksand greater export opportunities," Ind-Ra says in a note. "Thechanges in China's energy policy related to the price band for power couldcause a key structural shift within the sector, thereby supporting steel prices in the international as well as domestic markets."
Lower Chinese exports, prevailing trade tensions between China and the West, the Bidenadministration's proposal for a $2 trillion infrastructure bill, and healthy EUsteel demand should prove beneficial for Indian steel players, the credit rating agency observes.
Despite the energy crisis, China is unlikely to relax import restrictions on Australian coal in order toease supply. There are approximately 4-5 million tonnes of thermalcoal, as well as additional coking coal in Chinese ports originating in Australia that cannot be cleared.
Short comments: due to the electronic limited policy in China, the steel price are increasing, as well as the exchange rate of USD-CNY is decreasing, we are about to adjusting the product price next week.
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