Why Chinese steel is keeping Indian companies on the edge

livemint.com:

₹57,900 per tonne in September, fell to just over ₹54,000 in February, as per data from SteelMint. “Our retail sector sales dropped because of higher imports from China and FTA countries in the last quarter," Jayant Acharya, joint managing director of JSW Steel said in a recent interview. “Our imports rose by 16% and our exports fell by 16%, and that impacted basic sentiments and retail." The Ebitda margin of JSW Steel contracted nearly 57 basis points sequentially during the December quarter to 17.1% as per Mint’s analysis.

Ebitda stands for earnings before interest, taxes, depreciation, and amortization. Tata Steel, Jindal Steel and Power and Steel Authority of India reported Ebitda margins of 11.3%, 24.3% and 9.2% during the quarter, as per Mint’s analysis. Any Chinese stimulus for its infrastructure sector may raise steel prices, said Jayanta Roy, senior vice-president, Icra.

“China’s government is trying to revive the country’s domestic property sector. Any large Chinese stimulus measure in 2024 directed to the property and infrastructure sectors has the potential to improve Chinese domestic steel demand growth prospects, which can have a significant impact on global steel prices if Chinese exports come down as a result of that," Roy said. User industries say that if Chinese steel prices go up, local prices may rise as well, lifting their input costs.

“Chinese steel that was being imported was very competitive at some point in time. The slowdown in Chinese economy has made sure that the capacities they have are utilized outside of China," R. Shankar Raman, chief financial officer of engineering and construction major Larsen & Toubro said after the company’s earnings release.