According to Icra, in 2020-21, China emerged as the single-largest importer of steel from India. However, with the Chinese steel demand growth waning in the current fiscal, the share of steel exports to China by Indian mills has plummeted to just 8 per cent in the first half of the ongoing fiscal from 30 per cent in the preceding financial year.

“As demand dries up back home, a steadily rising trend in Chinese steel exports suggests that competition in the export markets between Indian and Chinese mills could intensify going forward,” it said.

The demand has been affected as a few Chinese property developers faced financial issues, and the Chinese property industry accounts for around 15 per cent of global steel demand.

To prevent the housing market from overheating and to mitigate broader systemic risks to its economy. with the Chinese property sector accounting for around 15% of global steel demand, the ongoing readjustment away from a property driven model of growth in China is likely to have an adverse impact on the steel industry for an extended period. This could signal the start of mean reversion for the commodity