India’s finished steel exports jump 11% m-o-m in Jul’21

India’s finished steel export volumes rose by 11% m-o-m to 1.512 million tonnes (mn t) in Jul’21 as against 1.368 mn t seen in the previous month, SteelMint learned from the recent Joint Plant Committee (JPC) report. Similarly, export volumes moved up by 10% y-o-y against 1.376 mn t in Jul’20.

Factors driving higher exports-

• Sluggish domestic demand: Sluggish demand and limited buying in the domestic market owing to the second wave of Covid and seasonal lull due to the monsoon led to a shift in interest of steelmakers to exports. For instance, in a recent press release, Jindal Steel and Power Limited (JSPL) informed that, its export sales accounted for more than 40% of total sales in Jul’21, due to improved overseas demand. Moreover, higher prices of the material did not get absorbed in the traders’ market.
• Better export realisations: Steel producers were more inclined towards exports as profit margins remained higher compared to those in the domestic market. SteelMint’s Indian HRC export index stood at $912/tonne (t) FoB east-coast at the beginning of Jul’21. Meanwhile, in the domestic market, HRC (IS2062, 2.5-8mm) prices stood at around INR 65,000/t ($875/t) (exy-Mumbai). Prices do not include GST extra @18%.
• Bookings recorded in Jul: There have been a few export deals reported during the month, mainly to Vietnam, Turkey, and South Korea. Deals were booked during Jul’21 and are pertaining to Aug-Sept delivery:

a) 50,000 t of HRCs were booked to Turkey at $945-950/t CFR basis.
b) 60,000 t of HRCs were booked to Vietnam at $925-930/t CFR basis.
c) 40,000 t of HRCs were booked to South Korea at $945-950/t CFR basis.

In Apr-Jul’21, export volumes jumped 9% to 5.069 mn t in comparison with 4.641 mn t in the same period last year.

Finished steel imports rise 2% m-o-m: Import volumes of finished steel stood at 0.410 mn t in Jul’21 as against 0.402 mn t in Jun’21, up by 2% m-o-m and 40% y-o-y. Import volumes in Jul’20 were at 0.293 mn t. Also, during Apr-Jul’21, Indian mills imported 1.568 mn t, up 4% as compared to 1.505 mn t in the corresponding period last year (CPLY).

Crude steel output at 9.725 mn t in Jul’21: Indian steel mills produced 9.725 mn t of crude steel in Jul’21 as against 9.362 mn t a month ago, recording a 4% increase on a monthly basis. The rise in production has come on the back of better capacity utilisation rates on easing Covid restrictions and decline in the number of cases last month.

In Apr-Jul’21, crude steel production aggregated to 37.527 mn t, up by 45% as against 25.955 mn t in the same period last year.

Finished steel consumption increases marginally: The volumes of finished steel consumption in the country were up marginally by 1% to 8.245 mn t in Jul’21 as against 8.191 mn t a month ago. Buying interest in the domestic market picked up slightly mid-month with market participants expecting an increase in prices from major steel producers for Aug delivery materials.

Meanwhile, on an annual basis, consumption improved by 7% with a gradual recovery from the pandemic. Similarly, during the Apr-Jul’21 period, consumption rose by 66% to 33.092 mn t in contrast to 19.922 mn t in CPLY.