Indian Defense
How China Is Increasing Its Influence On Global Commodity Markets
The rapid rise and fall in commodities show how dependent the commodity markets are on China. China is either the single-largest seller or buyer in many of these commodities making it extremely crucial for commodity markets
Iron ore prices hit an all-time high of $230 in May 2021, but just four months later, the prices have already fallen by more than 50 per cent. Aluminium prices hit an all-time high recently, on the back of a demand glut. The high volatility in the commodity space has one reason — China.
In the case of iron ore, China is responsible for almost 50 per cent of the world’s steel output. During the first half of 2021, Chinese steel output had already increased by 12 per cent over the previous year. The rapid recovery in steel and high demand fuelled iron ore prices to new highs. But with the high price of iron ore, the Chinese government swooped in to crack down on what it considered to be an overheated market. Its National Development and Reform Commission began investigating the spot iron ore markets and cracking down on hoarders.
The crackdown, and the consequent increase in supply, began pushing global iron ore prices lower in June. In May, China also increased export taxes and tariffs to lower domestic prices by disincentivising exports.
Further, today China is looking to curb steel production as it seeks to cut down on emissions and also keep prices of input materials low. Steel is a power-intensive sector and therefore the government has placed curbs on steel production. Though China has set output cut targets for provinces, only a few seem to be on track to make these cuts. The plans to curb emissions from the steel sector date back to 2013, when the government had asked its largest steel production province to cut down on steel production capacity by 60 million tons by 2018.
The cut in steel production has only propelled global steel prices upwards, whereas the price for iron ore has continued falling.
Australia and Brazil, which are China’s top iron ore suppliers, face trouble with low iron ore prices. China has also begun sourcing metals from African nations where it has made several investments and has also become a creditor to some countries.
Other commodities like coal have seen their prices increasing as China struggles to procure coal in order to keep its economy running. Coal prices reached an all-time high with the increasing demand from China, which is the largest consumer of coal in the world.
Aluminium has seen its prices skyrocket after Chinese smelters began production cuts due to the lack of power supply and in order to comply with emission norms.
The Evergrande crisis is another reason for panic in the commodity markets. China achieved this supremacy through years of debt-fuelled growth in industries and infrastructure. But today, with the property sector faltering and the Chinese government wanting to cut back on debt, the growth could falter.
The property and infrastructure sectors contribute to a large part of China’s gross domestic product (GDP), and with a slowdown commodity prices could crash. The slowdown could begin with businesses but could also lower the consumption of China’s 1.4 billion people. Even the food industry could face a crisis due to production cuts by animal feedstock producers.
The rapid rise and fall in these commodities show how dependent the commodity markets are on China. China is either the single-largest seller or buyer in many of these commodities making China’s economy trajectory extremely crucial for commodity markets.
Indian Defense
INS Arihant’s Nuke-Capable K-4 Submarine-Launched Ballistic Missile ‘Ready To Roll’
The solid-fuelled K-4 missile is being developed by DRDO to arm the country’s nuclear-powered submarines in the shape of INS Arihant and its under-development sister vessels. INS Arihant, which became fully operational in November 2018 to complete India’s nuclear triad, is currently armed with the much shorter K-15 missiles with a 750 km range.
“The K-4 is now virtually ready for its serial production to kick-off. The two tests have demonstrated its capability to emerge straight from underwater and undertake its parabolic trajectory,” said a source.
India has the land-based Agni missiles, with the over 5,000-km Agni-V inter-continental ballistic missile now in the process of being inducted, and fighter jets jury-rigged to deliver nuclear weapons. But INS Arihant gives the country’s deterrence posture much more credibility because nuclear-powered submarines armed with nuclear-tipped missiles are considered the most secure, survivable and potent platforms for retaliatory strikes.
Once the K-4 missiles are inducted, they will help India narrow the gap with countries like the US, Russia and China, which have over 5,000-km range SLBMs. The K-4 missiles are to be followed by the K-5 and K-6 missiles in the 5,000-6,000 km range class.
The 6,000-ton INS Arihant, which is propelled by an 83 MW pressurised light-water reactor at its core, in turn, is to be followed by INS Arighat, which was launched in 2017. The next generation of nuclear submarines, currently called S-4 and S-4*, will be much larger in size.
Indian Defense
After Upgradation, Sukhoi Su-30MKI Indigenisation To Reach 78%
India has received clearance to upgrade 84 Sukhoi Su-30MKI fighter jets, which will result in 78% indigenization after the upgrade
In a significant step towards bolstering its military might with indigenously developed technology, India is poised to witness its Russian-origin Sukhoi Su-30MKI fighter jets evolve into a domestic platform. Speaking at a recent lecture.
The upgrade program is being led by Hindustan Aeronautics Limited (HAL) in partnership with the Indian Air Force and other partners. The upgrade is expected to cost US$7.5 billion.
This initiative is a part of a larger effort by the Indian Air Force to modernize its ageing fleet. Air Chief Marshal Chaudhari asserted the critical role of an offensive air force as demonstrated in current global conflicts and emphasized India’s move towards an indigenized arsenal. To this end, the IAF has been proactive, from upgrading its Mirage 2000 to enhancing its MiG-29 fleet.
In summary, the IAF’s commitment to updating their combat forces with the latest technology, including shifting to fifth-generation fighter jets, ensures operational preparedness and a strong deterrence capability. The gradual indigenization of its air fleet marks a pivotal shift in India’s defence landscape, reducing dependency on foreign imports and fostering technological sovereignty.
Indian Defense
Akash Weapon System Exports For The Armenian Armed Forces Gathers Pace
According to unconfirmed reports, Armenia is a top contender for an export order for Akash SAM system manufactured by Bharat Dynamics Limited (BDL).
The Akash export version will also be slightly different from the one inducted by the armed forces. The 100-km range air-to-air Astra missiles, now entering production after successful trials from Sukhoi-30MKI fighters, also have “good export potential”, said sources.
Akash is a “tried, tested and successfully inducted systems”. Indian armed forces have ordered Akash systems worth Rs 24,000 crore over the years, and MoD inked a contract in Mar 2023 of over Rs 9,100 crores for improved Akash Weapon System
BDL is a government enterprise under the Ministry of Defence that was established in 1970. BDL manufactures surface-to-air missiles and delivers them to the Indian Army. BDL also offers its products for export.
Akash Weapon System
The AWS is a Short Range Surface to Air Missile (SRSAM) Air Defence System, indigenously designed and developed by Defence Research and Development Organisation (DRDO). In order to meet aerial threats, two additional Regiments of AWS with Upgradation are being procured for Indian Army for the Northern borders. Improved AWS has Seeker Technology, Reduced Foot Print, 360° Engagement Capability and improved environmental parameters.
The project will give a boost to the Indian missile manufacturing industry in particular and the indigenous defence manufacturing ecosystem as a whole. The project has overall indigenous content of 82% which will be increased to 93% by 2026-27.
The induction of the improved AWS into the Indian Army will increase India’s self-reliance in Short Range Missile capability. This project will play a role in boosting the overall economy by avoiding outgo of precious foreign exchange to other countries, increasing employment avenues in India and encouraging Indian MSMEs through components manufacturing. Around 60% of the project cost will be awarded to the private industry, including MSMEs, in maintaining the supply chain of the weapon system, thereby creating large scale of direct and indirect employment.
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