A steel delegation comprising heavyweights from Steel Authority of India Ltd, Tata Steel, Ispat, Jindal and Essar, under the aegis of the Indian Steel Alliance, is expected to visit China, next month.

The delegation is aimed at exploring the possibilities of Indian steel in the infrastructure development in China.

An ISA member said, a trip is being planned towards the end of next month. Meetings would be held with different associations in China, including the Chinese Iron and Steel Association, the ISA counterpart in China.

The main objective of the delegation is aimed at building relationships.

“We would also like to know what kinds of steel have been identified by the Chinese companies for use in infrastructural projects that are currently underway and details of such projects and more importantly, what role the Indian steel industry could play in such projects” said sources.

The visit to China assumes significance as China has become one of the most important markets for Indian steel. More and more steel companies are pushing material into China. In fact, many of the prominent steel corporates have already set up a marketing base in China.

According to estimates of the World Steel Dynamics, apparent steel consumption in China has gone up by a whopping 44 million tonne from 118.3 million in 2000 to an estimated level of 162.8 million tonne in 2002.

But, production at the end of 2001 was at 126 million tonne. The Indian steel companies are looking at bridging the gap between the production and demand in that country. India has a total production of 30 million tonne.

The potential segments are iron ore, pellets where the ferro content in China is much less than India, hence the country has to depend heavily on imports. Cold rolled sheets, galvanised sheets, hot rolled sheets/ strip and stainless steel sheets are the other areas where the Indian steel industry can hope to make some inroads.

A comparison between Chinese steel industry and India shows that China is miles ahead.

The differences are largely due to higher rates of capital formation, larger contribution of the commodity sectors to the general economy in China compared to India.

Per capita consumption of crude steel in China increased at the rate of 7.25 per cent annually to reach a level of nearly 90 kg from a mere 2 kg in 1950.

In comparison, India started with a per capita consumption of 5 kg, which grew at 3.24 per cent annually over the last half century to 23 kg currently.