Welcome to Avida Engineering Materials Co., Ltd


mechanical equipment

Crude steel production up 5.2% at 61.1 MT this fiscal

The current trends in the global economy are highly influenced by the conflicting events in the political scenario of major economies. While US economy shows an increasingly strong feature with GDP touching 3.0%, unemployment rate down at 3.7%, CAD at (-)2.6% of GDP, capacity utilisation in steel rising to around 80% due to more investment in infrastructure and cuts in corporate tax, the EU is passing through a challenging time. Political power in Germany exhibiting an uncertain future despite robustly positive CAD (+ 7.9% of GDP)with conflicting reports on BREXIT resolution, while Italy, France and Spain experiencing lower GDP and higher unemployment rate (9.3-14.9%). Latin American economies led by Brazil, Argentina signal disastrous signals (GDP 1.0 to negative) with huge political uncertainty, Iran facing US sanctions may add to rise in Brent Crude oil price despite falling trend in the last few weeks and Turkish economy facing massive unemployment and steep rise in consumer prices. Russia is performing better with nearly 2% GDP growth, manageable inflation and unemployment rate and a positive CAD.
In the face of the emerging global risks of trade war between USA and China with repercussion in other trading nations, interest rate hike in USA prompting a reverse flow of FPI and destabilising political development in a number of major countries as discussed above, Chinese economy is moving ahead with a growth within a band of 6.5 plus or minus 0.2 with a CAD limited to a positive 0.5% of GDP. It is interesting to note that China is working hard to achieve the fundamentals of a market economy with lesser control on prices, reduction of custom duties, support (financial and infrastructural) for the private industrialists on the same level as extended to State Enterprises. A recent report by S&P Global Platts has indicated interesting developments happening in Chinese economy. These are; a) more stimulus in the form of infrastructure investment in Q4 to spruce up GDP growth and implying a relaxation in monetary control, b) China is reducing tariffs including those on steel, textiles, building materials to 8.4% from the current level of 11.5%, Handan and Hebei provinces are going ahead to eliminate steel making capacities in order to lower its Particulate Matter 2.5 concentration, c) Private units in China showing lower profits and high debt to asset ratio are facing shrinking credits from banks and are threatened with changed management and labour unions. The stringent environment rules make their existence expensive.
The trade frictions with USA, a higher revenue realisation in the domestic market and emergence of small players like Qatar, Malaysia, Egypt, Turkey in rebar and HRC have made Chinese exports to drop to 58.41MT in the first 10 months in the current year, a fall of 9.3% compared to previous year. Chinese production growth of 6.1% to take CS production to 699.4 MT in the first 9 months of 2018 would justify a higher domestic steel volume.
China has cut down its import of metallurgical coal and continuing its import of iron ore to restrict domestic prices to decline further which would be uneconomic for indigenous iron ore concentrate producers to continue.
These eco-political developments in the global market and continuation of growth with stability in China have huge implications for India. As inflation has started to exceed 5% (WPI for September’18 at 5.13%) and CAD at (-) 2.6% of GDP by Q2, the economy is to tighten the belt a little to allow investible funds reaching the intended groups. A widened CAD indicates gap between saving and investment which needs to be brought down in order to continue a non-inflationary method of deployment of funds into critical sectors of the economy. Hopefully the recent depletion in foreign exchange reserve would be reversed with indications of financial consolidation and continuation of economic reforms.
India has climbed back to 77th positions, a jump of 53 within 2 years with notable growth achieved in parameters like dealing with Construction permits, getting electricity, getting credit, protecting minority investors, trading across borders and resolving insolvency. All these developments have a positive impact on steel industry. The Crude steel production in the first 7 months of the current fiscal at 61.1 MT has grown by 5.2% with India strongly positioned at 2nd number in the global market.
Steel imports at 5.3 MT has fallen by a lower rate (4.3%) as compared to exports at 5.0 MT (a decline of 33.6%) thereby making the country a net importer. Steel consumption in the country at 56.0 MT during the period indicates growth of 7.9% which is one of the highest in the world. More indigenous capacity are needed to restrict imports of value added steel and to cater to the rising demand from the critical sectors like defence, railways, oil and gas sector and urban infrastructure. The resolution of NCLT referred cases (Essar steel, Bhusan Steel and Power, Eletro therm and a few others) must be finalised within the next 6 months to instil confidence among the buyers and institutional purchasers about the ability of Indian firms to make steel available indigenously.

Being a premier manufacturer of road and railway related products in China, Nanjing Avida Engineering Materials Co., Ltd has gained the reputation of exceptional quality, innovation and customer service for years

 Factory: Economic development zone, Chahe Town, Lai'an County, Chuzhou City, Anhui Province

Mob: 0086-13952069398  

Email: sales@njavida.com; info@njavida.com