From pv magazine India.
Any slowdown in Chinese exports to the U.S. caused by rising trade tensions between the two nations could see China direct its goods to emerging markets, including India.
The dumping of Chinese products at predatory rates could potentially disrupt the demand-supply dynamics in Indian domestic markets, especially for products such as electronic goods, iron, steel, chemicals and polymer products – according to a report by India Ratings and Research (Ind-Ra).
An Ind-Ra report noted Indian exports are unlikely to replace the volume of Chinese goods lost to the U.S. as there is a stark difference in the nature of commodities exported by the two nations to America. For instance, pharmaceutical products and gems and jewelry accounted for around 30% of Indian exports to the U.S. while electronic and capital goods made up 47% of China-to-U.S. trade last year.
With Chinese industrial production continuing to expand at around 5% per year and exports to the U.S. contracting in recent years – a situation worsened by the imposition of tariffs by President Trump – Chinese exporters have started penetrating alternative markets.
According to Ind-Ra, Chinese exports to other Asian emerging markets rose 20.7% last year, versus 12.75% in 2010.
“This has largely been catalyzed by the Chinese manufacturers’ ability to undercut domestic manufacturers in these markets, resulting in lower market share for the domestic players,” stated the report. “This risk is further exacerbated by the benign domestic demand conditions, coupled with weak capacity utilization levels in China.”
In particular, the amount of Chinese steel, polymer and capital goods imported by India could rise as Chinese exports to the U.S. fall away. The impact could percolate down to lower international prices, thereby putting further pressure on Indian prices.
Steel dumping under the lens
pv magazine has reported the Directorate-General of Trade Remedies (DGTR) is already investigating allegations of the dumping of aluminum and zinc-coated steel in India by manufacturers in China, Vietnam and South Korea. The investigation was opened following a complaint by JSW Steel Coated Products. Such corrosion-resistant goods are used in industrial sectors including solar projects.
The DGTR will be investigating imports of aluminum and zinc-coated steel between October 2017 and September 2018.
If the directorate establishes dumping caused material injury to domestic concerns, it is likely to recommend the imposition of anti-dumping duties on such imports, as permitted under World Trade Organization rules.
JSW Steel Coated Products accounts for more than 60% of India’s production of flat-rolled steel that is plated or coated with alloys of aluminum and zinc. Tata BlueScope Steel, Tata Steel BSL Limited and Asian Colour Coated Ispat Limited are the other major domestic producers. Of those, Asian Colour has not been in production since 2017.
It emerged this week the U.K.’s British Steel has asked the government for a bailout loan to prevent it collapsing. A lack of orders due to Brexit uncertainty has compounded the problem of competing with cut-price Asian rivals.
This content is protected by copyright and may not be reused. If you want to cooperate with us and would like to reuse some of our content, please contact: email@example.com.