India’s overall steel exports in Jan-Jun’21 (H1) increased by 27% to 9.5 million tonnes (mn t) against 7.8 mn t seen in the same six months of CY’20, SteelMint’s latest data reveals. Interestingly, the data further shows that so far this calendar, it was longs that drove up the numbers, surging by over 130%, while flats exports grew a more modest 26% and semis down by 3% in the period under review.
Total finished flats exports in H1’21 were at 4.7 mn t against 4.47 mn t in H1’20. Finished longs touched 1.05 mn t against 0.45 mn t in the same period while total semis exports were at 3.72 mn t against 3.71 mn t in CPLY.
Why did longs lead the charge?
- Rebar and wire rod surge: A substantial volume of rebar and wire rod were exported in H1’21, unlike in the same period last year. Rebar and wire rod exports in H1’21 rose a whopping 140% to 0.94 mn t against 0.38 mn t in H1’20 while structure exports were up 74% at 0.12 mn t in H1’21 compared to 67,516 tonnes in H1’20.
- CRCs and galvanised in demand: In finished flats, overseas demand in H1’21 was mainly for galvanised products. CRCs exports doubled to 0.48 mnt in H1’21 against 0.24 mn t in CPLY.
- Semis subdued: Billets exports dropped by 3% this H1. It may be recalled, last year, amid Covid’s first wave and lockdowns, all major Indian mills had survived, especially in Apr-Jun, by heavily selling billets/slabs, and to an extent pig iron and finished flats, thanks to good demand mainly from China.
“Most of the countries last year were in lockdown and so overseas mills did not have the option to roll billets. Hence, they opted for semis from India and other countries,” recalled a source.
Pig iron exports have risen 33% in H1’21 to 0.58 mnt against 0.44 mn t in CPLY.
Factors driving up Indian steel exports
- Lockdowns across the country, coupled with the rain have resulted in a sharp drop in domestic demand. However, mills are burdened with inventory and need to liquidate the same through overseas sales to offset the lack of demand at home.
- The Chinese government is disincentivizing exports through production cuts, taxes and price crackdowns because it wants mills to service domestic demand first as well as control pollution. In such a scenario, buying finished products from Indian mills is an option for Chinese end-users.
- The weakened rupee (INR) is helping exporters rake in higher realisations. The INR is ruling at 74 levels against the dollar. In the same period last year, the INR was at around 71.
Outlook
SteelMint expects export volumes for the full year to sustain at 18-19 mn t compared to last calendar year’s 17 mn t. Of course, maintaining the exports buoyancy will depend on the dynamics of domestic and global demand.
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