India’s pig iron export volumes were recorded at 1.3 million tonnes (mn t) in CY’21, as per customs data. Exports increased by around 50%, thanks to robust demand from China and supportive domestic as well as global sentiments. Last year, pig iron export volumes were recorded at 0.89 mn t.
Highlights –
- Vedanta, JSPL top exporters: Vedanta continued to be the leading exporter of pig iron in CY’21. The company exported 397,300 tonnes (t), an increase of 133% compared to CY’20. Next was JSPL with 359,960 t. JSW’s Bhushan Power & Steel (BPSL) and Rashmi Metaliks were the other major exporters with 183,646 t and 153,035 t, respectively. MMTC’s exports remained nil for the second year in a row.
- China top importer but volumes decline: China continued to remain the top importer of Indian pig iron with 293,360 t in CY’21. However, volumes dropped significantly by 39% y-o-y compared to CY’20. Other major importers were Turkey and USA.
Factors supporting exports –
- Increased Chinese buying due to high scrap prices – Scrap prices in China touched their highest levels in CY’21 which propelled steelmakers to switch to pig iron as a steelmaking substitute. China’s pig iron imports from India remained on the higher side in CY’21, pushing up prices. Even now, scrap prices continue the upward trajectory which is driving pig iron demand.
India’s pig iron export prices edged up in a recent deal. An Indian mill concluded an export tender for 30,000 t-35,000 t of basic grade pig iron for end-Jan shipment. The tender was concluded at $535-540/t CFR China, equivalent to around $500/t FOB India.
- High coking coal prices make imports viable
Coking coal prices rallied in the second half of CY’21. As per CoalMint data, Australian coking coal prices jumped to $440-450/t FOB Hay Point in Oct-Nov.
As coking coal prices continued to rise, pig iron producers’ profits started eroding. In fact, importing pig iron became more viable for them.
Pig iron exports from India more than doubled to 0.71 mn t in H2CY’21 compared to 0.35 mn t in H2CY’20.
- Increased pig iron production boosts exports
Vedanta, a leading merchant pig iron producer, recorded output at 202,000 t in the third quarter of FY’22 (Oct-Dec’21). Production volumes increased by 39% compared to 145,000 t in Q3FY’21 due to better operational capacity of its furnace after capital repairs.
India’s cumulative pig iron production in Jan-Nov’21 was recorded at 5.10 mn t, higher by 35% y-o-y compared to the same period last year. In fact, total pig iron production in CY’20, which was at 4.18 mn t, is 22% lower compared to volumes recorded in Jan-Nov’21.
Increased production was also one of the factors that led to higher pig iron exports, SteelMint understands.
Out of the total merchant output of 4.8 mn t in FY’21, production of steel grade pig iron was assessed at 3.65 mn t. Foundry grade pig iron accounted for the rest 1.15 mn t.
Outlook
Going forward, Indian pig iron exports are likely to remain on the higher side on supportive sentiments like increasing prices of raw materials (iron ore, coking coal and scrap) and strong demand from China. Improved domestic sentiments will also keep exports supported.
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