The China Iron and Steel Association has projected that its annual consumption would rise to 300 million tonne over the next five years, which implies that the steel boom riding on China will continue for some more time.

Responding to a Business Standard questionnaire, Dr J J Irani, chairman of the Indian Steel Alliance, said China expected an increase of around 20 to 25 million tonne per year till the overall consumption in China reached around 300 million tonne in the next 4-5 years.

China was expected to close the year with a consumption in excess of 220 million tonne during the current year, out of which 30 million tonne would be imported.

The import figure was a significant increase over last year's 24.5 million tonne. However, the Chinese steel sector was also on in expansion mode.

The increase in Chinese consumption came as good news to Indian producers who had been increasing exports to China at a frenetic pace.

During the current year, the figure had already touched 1.5 million tonne and before the calendar year ended it was likely to be around 2 million tonne. Last year, India exported one million tonne steel to China.

Irani said, while the Chinese expressed their concern at the sharp increase in the export of flat products from India to China, the delegation was of the view that they would not initiate any strong action against the imports of Indian steel as long as the recently noticed spurt was held in check in the future months.

The Chinese government had issued a warning to the Indian embassy on Indian exports crossing the 3 per cent threshold limit, which ran the risk of attracting safeguard measures.

The two items mentioned specifically in the letter to the embassy were colour coated and galvanised products. China imports around 15 million tonne flat products.