Indian steelmakers’ profitability will outperform their regional peers owing to increasing domestic demand and the Indian government’s protectionist measures, according to Moody’s.

India has minimum import prices, as well as anti-dumping duties in place that are supporting local mills. Moreover, the expected ramp-up of Tata Steel’s green-field Kalinganagar plant and JSW’s brownfield expansion will help raise these companies’ earnings in 2016, the credit rating agency says.

“India, which accounts for 8% of Asian production, will increase steel production to meet rising domestic consumption,” Moody’s says in a note sent to Kallanish. Indian and Southeast Asian demand is expected to increase by a mid- to high-single-digit percentage in 2016 and 2017.

“But this increase won’t be enough to prevent the aggregate regional production decline,” the credit rating agency continues. “We expect Asian steel demand will continue to decline by a low single-digit percentage in the next 12 months owing mainly to slowing demand from China’s manufacturing and property sectors.”

China’s economic slowdown will continue to push down earnings at major steelmakers (see separate article).