India’s steel exports more than doubled between April and July to hit their highest level in at least six years, boosted by Chinese buying.Traders said reduced prices had driven the purchases as Indian sellers sought to get rid of a surplus generated by the impact of COVID-19 on domestic demand and generate much-needed income.It was unclear whether the sales broke any trade rules, but the China Iron and Steel Association said in a statement it was monitoring them.Leading Indian steel companies Tata Steel Ltd. and JSW Steel Ltd. were among Indian companies that sold a total of 4.64 million tonnes of finished and semi-finished steel products on the world market between April and July.That compared with 1.93 million tonnes shipped in the same period a year earlier, government data analysed by Reuters showed.Vietnam and China bought 1.37 and 1.3 million tonnes of steel respectively. The Chinese purchases are by far the largest since data was first collated in the current form beginning with the fiscal year 2015-2016.Neither Tata, JSW nor India’s ministries of steel and commerce responded to e-mails seeking comment.Vietnam has been a regular buyer of Indian steel, but China’s emergence as a leading buyer, replacing New Delhi’s traditional markets, such as Italy and Belgium, is more surprising.An already uneasy relationship between New Delhi and Beijing, became severely strained after violent border clashes in June, when 20 Indian soldiers were killed at the disputed Himalayan border.New Delhi afterwards tightened rules to restrict Chinese investment in India and initiated measures to curb its trade with Beijing.Rhetoric vs realityThe politics is at odds with market realities.Although China, the world’s leading steelmaker produces vast quantities, it needs imports as it ramps up infrastructure spending.Two industry sources said major Indian steelmakers offered a discount of at least $50 a tonne, selling hot-rolled coils and billets to China at $430-$450 per tonne against the $500 offered by most Chinese producers.Hot-rolled coils are mostly used to make pipes, automobile parts, engineering and military equipment.During the first four months of the fiscal year, China and Vietnam together bought close to 80% of India’s total hot-rolled coils exports, the data showed.Ji Renjie, a general manager at China’s Ningbo Henghou Group said the firm in May bought 30,000 tonnes of hot-rolled coils from India for July shipment and expected to take delivery of another cargo of a similar size in October.“I mainly do iron ore trades and just bought several cargoes of hot-rolled coils this year due to rosy profit margins,” Mr. Ji said.
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