Chinese steel exports to Indian are down 57% MoM in July’10. Exports to India constituted only 5% of the total Chinese steel exports in July’10 as compared to an average of 11% during Apr-Jun’10.
We believe that the normalization of steel exports to India and a gradual recovery in domestic steel prices in China (+8% MoM) is likely to remove one of the key overhangs over the Indian steel sector.
Export decline positive for global steel equities especially India
We believe that reduction in steel exports from China along with declining steel production is a positive development for the global steel equities, particularly India.
Steel deliveries of Indian steelmakers were adversely hit in 1Q’FY11 on account of the deluge of steel imports from China. With Chinese steel exports now in retreat, we expect a sequential recovery in steel deliveries from domestic steel makers in the ensuing quarters
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