Domestic steel producers are not perturbed by the slowdown in the Chinese economy, as they are diverting their exports to more lucrative markets such as the US and Europe.

Ispat officials said the steel major had moved in favour of more remunerative markets. Prices in the US, Europe and the Middle East, at present, are much higher than those prevailing in China. While the prices of galvanised products in the US ranged between $750 and $825 a tonne, those in China were at $700 a tonne.

Prices of hot rolled coil in the Europe range between $580 a tonne and $620 a tonne, while that in China is quoting at $530 a tonne.

However, most steel majors also feel the slowdown in China is temporary and the country will still have to depend on imports, to a large extent.

A Essar Steel spokesperson said, according to China Iron and Steel Association forecast, China's import requirement for the year will be around 30 million tonne till December 2004.

The spokesperson clarified that owing to the curb on exports to China from India, the steel majors had gradually scaled down their dependency on the Oriental nations and were moving their goods to Middle East, south east Asia and Europe.

"We have learnt our lesson from the US anti-dumping case and have kept our export basket widespread," said the spokesperson.

Last year, the Chinese government had issued a warning to Indian steel producers when exports crossed the 3 per cent threshold limit, which technically could attract safeguard measures.

Raman Madhok, deputy managing director Jindal Iron and Steel Co, reinforced that exports to China were not significant owing to softening of rates.

"The difference in prices between China and US in the case of galavanised products was as high as $50-75 a tonne" said Madhok.

The stock markets, however, reacted sharply to news of slowdown in China as major steel and metal scrips tanked. Market analysts attributed the downward trend to the slowdown in China.

The Tata Steel scrip on Monday was down by 4.28 per cent and closed at Rs 342.50. Jisco moved down 2.75 per cent and closed at Rs 166.05, while Ispat declined 4.96 per cent and closed at Rs 8.62. Steel Authority of India Ltd dipped 5.85 per cent to close at Rs 33.