In a statement, the Indian Stainless Steel Development Association (ISSDA) also said the surplus production in Indonesia is likely to be pushed into the Indian market.
Indonesia may overtake India as the second-largest stainless steel producer in calendar year (CY) 2021, as per the latest melt shop projections presented in International Stainless Steel Forum (ISSF) annual conference held virtually last week.
Indonesia, which presently ranks fourth in global stainless steel production, will overtake Japan and India with a total production of 4.2 million tonnes (MT), ISSDA said.
India is projected to produce 3.5 MT stainless steel this year. In 2020, it produced 3.2 MT stainless steel, the body said.
Massive capacities built up by Chinese stainless steel companies in Indonesia are set to become operational this year, ISSDA said, adding surplus production may be targeted for Indian markets.
ISSDA President K K Pahuja said the Chinese government withdrew export tax rebate in May 2021, which restricts the export of stainless steel from China. The Chinese companies have been setting up large capacities in Indonesia.
"This has implications for India as we estimate that import intensity from Indonesia will nearly double as trade remedial measures like Countervailing Duty remains suspended since the announcement in the Union Budget," he said.
To support his point, the industry veteran said the capacity of over 5.5 MT set up in Indonesia is nearly 25 times the local demand of about just 0.2 MT. The production is entirely targeted to export markets.
Pahuja further said Indian stainless steel market is the second-fastest-growing market after China and has been a target of large-scale dumping of stainless steel flat products.
In the pre-COVID period of 2019-20, as much as 24 per cent of the market was captured by imports, half of which came from Indonesia.
ISSDA said it represented India and showcased major developments in Indian stainless steel industry during the ISSF annual conference, held during May 17-27.
ISSF, a division of World Steel Association, held its annual conference ISSF25 virtually for the second consecutive year due to the pandemic.
This conference brings together the global stainless steel industry on a common platform to discuss industry issues and ways to promote stainless steel. PTI ABI ABM