Cold rolled coil (CRC) exports from India in Jan-Jun’21 (H1CY’21) were up a whopping 104% to 0.49 million tonnes (mn t) compared to 0.24 mn t seen in the same six months of CY’20.
In the Apr-Jun’21 quarter, exports spurted 169% to 0.35 mn t compared to 0.13 mn t recorded in the same quarter of the previous year.
On a m-o-m basis too, exports rose 45% to 0.16 mn t against 0.11 mn t in May’21. On a y-o-y basis, exports spiralled up 249% compared to a mere 47,000 tonnes seen in Jun’20.
Thus, overall, CRC exports uptrended in the entire H1 this year compared to H1CY’20 despite the fact that last year, April onwards, mills had fallen back on exports to stay afloat. Last year’s flats exports were mainly spearheaded by HRCs.
Europe keeps the tempo up
The main reason for the uptrend was the frenzied exports to Europe, especially in the Apr-Jun quarter. SteelMint’s data reveals that actual exports to the European Union in Jan-Mar’21 were down by 27% to 0.11 mn t compared to the quota quantity of 0.15 mn t. However, in the Apr-Jun’21 quarter, Indian mills exceeded the quota of 0.15 mn t by 8% to 0.16 mn t.
India’s top two exporting countries for finished flat products overall were Belgium and Italy, vindicating the fact that Europe kept up the CRC exports tempo in H1.
“CRC exports went up in H1 because demand for automobiles went up by around 75% in May in the EU,” corroborated a source.
CRC prices not under pressure
Interestingly, the firm export demand was a key reason for the widening spread between CRC and HRC prices. Mills have been mostly revising HRC list prices against the backdrop of subdued domestic demand in Apr-Jun, leaving CRC prices untouched, assured of high overseas demand, especially from Europe.
In fact, CRC export prices in Apr-May’21 ruled at around $1,400/tonne which translated into around INR 100,000/t against the domestic trade-level prices of around INR 74,400/t in Apr and INR 81,000/t in May.
Consequently, the domestic price spread had also widened to a record INR 16,500/t in mid-Jun’21. “Mills had refrained from revising downward their CRC prices because overseas demand was firm. They were not under any pressure with regard to CRCs,” added the source.
Outlook
With Indian mills having exhausted their entire CY’21’s flat steel export quota for Europe in the first five months of the year itself, there is limited scope for CRC exports in H2. Vietnam, despite being a lucrative flat steel export market, is mainly focused on HRCs.
~Madhumita Mookerji
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