Tata Steel and JSW Steel, two of India’s largest steel companies, are facing a challenge from rising Chinese imports. The COVID-19 pandemic had led to a surge in demand for steel in India, resulting in a significant increase in prices and profits for the steel industry. However, with the pandemic under control, demand has slowed down, and prices have fallen. Meanwhile, Chinese steel exports have increased, posing a threat to Indian steel companies.
According to data, China’s steel exports to India have risen by 34% in the first quarter of 2022 compared to the same period last year. This has led to a decline in Tata Steel’s and JSW Steel’s profits, with the companies’ cash piles shrinking. Tata Steel’s cash and cash equivalents stood at Rs 22,300 crore in the first quarter of 2022, down from Rs 31,400 crore in the same period last year. JSW Steel’s cash and cash equivalents declined to Rs 14,300 crore from Rs 18,400 crore over the same period.
The rise in Chinese imports is expected to continue, posing a challenge to Indian steel companies. The companies are likely to face pricing pressure and may need to reduce production to maintain profitability.