Indian billet exports during FY ’21 have registered a significant rise to reach a little over seven mn t against 1.8 mn t in FY’20. China, Nepal, Indonesia, Thailand, and the Philippines were the predominant buyers of the Indian billets during the period under consideration. While JSPL, RINL, and SAIL were the prominent exporters.
Reasons behind increased billet exports –
- Increased buying from China: The steep rise in the exports was primarily due to the increased buying from China. Chinese economy recovered comparatively at a faster pace than other countries.
As domestic supplies could not cater to demand it created room for imports. Though in the second and third quarters the domestic demand revived, the increasing Chinese domestic billet prices amid production cuts in China in the fourth quarter again revived the Indian cargoes. In Jul ’20, Indian billet export shipments hit a record high level (monthly) to reach 1.02 mn t.
According to data maintained with SteelMint, the Indian billet exports to China rose by eleven-fold in FY ’21 to 3.23 mn t, y-o-y.
In Mar ’21, the billet export shipments registered an m-o-m rise of 92% to reach 0.67 mn t. Exports to China increased seven-fold owing to rising Chinese domestic billet prices. Chinese domestic billet prices hit an eight-year high level in Mar ’21.
- Sluggish domestic demand during the pandemic: Indian mills were facing a tough time in Q2 CY’20 when mills had significantly lowered their steel capacity utilization rates due to imposed restrictions to curb the spread of the pandemic. Mills focused more on exports due to sluggish domestic demand. SteelMint’s index for Raipur domestic billet plunged to INR 26,000/t exw in the second week of May’20 which later recovered to INR 40,900/t exw levels in Jan’21.
Outlook: Indian billet exports are expected to remain strong in Q1 FY ’22* looking at active buying inquiries from China and SE Asia and rising COVID cases in India which may keep domestic demand dull.
Note: * -Corrected to FY ’22 from FY ’21
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