HomeBricks & MortarSteel Industry Faces Crisis Amid Rising Chinese Competition

Steel Industry Faces Crisis Amid Rising Chinese Competition

India’s burgeoning construction boom, characterised by towering high-rises and expanding highways, was expected to fuel demand for domestic steel. However, steel mills, especially smaller ones, are grappling with unsold inventory as they face stiff competition from cheaper Chinese imports. The situation has led to operational cutbacks, with some mills contemplating job cuts, as India’s steel sector confronts challenges from rising imports.

India, once a net exporter of steel, has become a net importer in recent years, a shift that has raised alarms in New Delhi. The influx of inexpensive Chinese steel has particularly affected smaller mills, which account for 41% of India’s total steel production and employ over 1.5 million people. According to industry executives, the capacity utilisation of these mills has dropped by nearly 30% in the past six months due to the pressure from low-cost imports. Mandi Gobindgarh, often referred to as Punjab’s “steel city,” is at the epicentre of this struggle. Adarsh Garg, chairman of Jogindra Group, shared his concerns, stating that the flood of Chinese steel, sold at 10% lower prices, has forced his company to cut production by a third and lose 30% to 35% of its sales in the past six months. If this trend continues, he warns that layoffs of up to 15% of the workforce may be inevitable.

Chinese steel imports, which have surged by over 30% this year, are particularly detrimental to India’s smaller steelmakers. Prices of Chinese steel can be as much as $70 per metric ton cheaper than domestic products, making it an attractive option for developers and engineering firms. The Builders Association of India has confirmed that Chinese steel’s price advantage is drawing buyers away from Indian suppliers. While small mills bear the brunt, even large Indian producers like JSW Steel and Tata Steel are feeling the strain. The Indian Steel Association has raised concerns about the survival of the sector, pointing out that profit margins have dropped by as much as 91% in the current fiscal year, forcing many to delay expansion plans.

In response, the Indian government is considering curbing Chinese imports, a process that could take up to six months to implement. However, officials are mindful of the potential for mass layoffs in the steel sector, which employs over 2.5 million people across India. Ensuring the financial stability of domestic steelmakers is seen as crucial for maintaining the momentum of the country’s infrastructure development, which underpins its position as the world’s fastest-growing major economy. The crisis also extends to India’s export markets. Mills across the country, from Uttar Pradesh to Maharashtra, are reporting lost orders to cheaper Chinese products, leading to production cuts and job losses. The Indian steel industry is under immense pressure to find solutions, with many urging the government to act swiftly to protect domestic manufacturers and their workforce from the flood of cheap imports.

RELATED ARTICLES
- Advertisment -spot_img

Most Popular

Recent Comments

Greater Noida Unveils 341-Unit Luxury Enclave With Focus On Green Living

Greater Noida Unveils 341-Unit Luxury Enclave With Focus On Green Living

0
Greater Noida is set to witness a new benchmark in ultra-premium housing with the launch of a ₹1,500 crore residential project featuring 341 luxury...
Pune Shapoorji Pallonji Targets Rs800 Crore From New Housing Project

Pune Shapoorji Pallonji Targets Rs800 Crore From New Housing Project

0
In Pune, Shapoorji Pallonji a leading real estate firm has announced the development of a new 5-acre residential project, 'VANAHA Verdant,' with an estimated...
Oberoi Realty Consortium Secures Rs 919 Crore Juhu Land Deal via NCLT Resolution

Oberoi Realty Consortium Secures Rs 919 Crore Juhu Land Deal via NCLT Resolution

0
A consortium led by Oberoi Realty has successfully secured a prime land parcel in Mumbai’s upscale Juhu locality for ₹919 crore through an NCLT-monitored...
Rustomjee Group Unveils Three Mumbai Redevelopment Projects Worth Rs 7,727 Crore

Rustomjee Group Unveils Three Mumbai Redevelopment Projects Worth Rs 7,727 Crore

0
Rustomjee Group launches three large-scale redevelopment initiatives worth ₹7,727 crore in Q1 of fiscal 2026. This move underscores the developer’s continued commitment to transforming the...
Bollywood Star Salman Khan Sells Bandra West Apartment For Rs 5.35 Crore

Bollywood Star Salman Khan Sells Bandra West Apartment For Rs 5.35 Crore

0
Bollywood actor Salman Khan has sold an apartment in the upscale Bandra West locality for Rs 5.35 crore, according to property registration documents reviewed...