Sponge iron exports from India in Jun’21 dropped 33% m-o-m to 49,858 tonnes against 74,811 t seen in May’21. On a y-o-y basis, however, exports of the material were down a mere 2.56% to 51,171 t in Jun’20.
Exports of the material in Jan-Jun’21 were at 345,808 tonnes, against 375,895 tonnes seen in the same period in the previous calendar, a drop of 8%.
Leading importers
Bangladesh was the leading importer of sponge iron from India, followed by Nepal and Bhutan. However, exports to Bangladesh fell 24% in Jun’21 to 39,616 t against 51,895 t in May. Similarly, exports to Nepal also dropped m-o-m by 53% to 7,449 t against 15,884 t in May. Bhutan also imported lower volumes at 2,631 t against 5,301 t in May, a drop of 50% m-o-m.
Market overview
Imports into Bangladesh down: This South Asian country, which is India’s highest importer of sponge iron, has had a resurgence in Covid cases in the last one month. The consequent lockdown restrictions have heavily affected consumption. Consequently, demand for sponge iron lessened considerably.
That apart, the ongoing monsoon season is also hampering demand, since traditionally construction activities come to a halt. Finished steel demand is also poor at present.
Nepal planning production cuts: Mills in this Himalayan kingdom are planning production cuts in keeping with demand-supply mismatch. Some mills have halted rebar production while continuing with making other finished goods to keep the cash flow going. Consequently, Nepal’s sponge iron imports from India dropped sharply.
Outlook
Exports of sponge iron may remain muted in the upcoming month since Bangladesh had extended its Covid lockdown till 14 Jul’21. That apart, the approaching Eid holidays, scheduled from 20 Jul will keep the market further quiet, dampening demand for finished steel.
The ongoing monsoon will also likely keep demand muted from Nepal.
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