India’s finished steel exports stood at around 0.749 million tonnes (mnt) in May 2022, range-bound when compared to 0.743 mnt in April 2022. However, export volumes recorded a significant decline of 39% y-o-y against 1.237 mnt in May 2021, as per provisional data released by the Joint Plant Committee (JPC) under the Ministry of Steel. The volumes have remained stable amidst pending deliveries of previously booked export orders.
Recent developments in export market:
- Dried up demand from EU, fresh quotas awaited: Earlier this year, the European Union was actively buying steel from India amidst the supply gap created by the Russia-Ukraine conflict. However, exports to the EU started slackening with the quotas getting exhausted. Whatever volumes were seen, had been previously booked, while limited fresh bookings are being heard of.
Another major importer of steel from India, Vietnam, was seen least interested in importing admist bid-offer disparities, longer lead times and tight availability of containers, factors which led to higher preference for domestically sourced products.
- Lucrative offers from China: China had been observing Covid-induced lockdowns for the last few months which resulted in dull domestic demand. Therefore, major mills in China were keen in offloading their inventories in the overseas markets at competitive offers. China’s HRC export offer stood at $810/t FOB China in May 2022, plunging by $90/t m-o-m as against $900/t FOB a month ago.
- Hefty export duty by Indian government: In late-May 2022, the Government of India imposed hefty export duties on steel and steelmaking raw materials and intermediaries in a bid to preserve higher domestic supplies and control rising prices.
An export duty of 15% has been levied on clad, plated or flat rolled products of iron or non-alloy steel of 600 mm width or more (including HRCs) from zero duty previously.
This will further impact India’s export volumes in the near term.
Crude steel production up 4% m-o-m in May
Crude steel production by Indian mills rose 4% to 10.598 mnt in May 2022, against 10.144 mnt in the previous month. Along similar lines, production volumes jumped 17% against 9.057 mnt in the same period last year.
Steel majors such as JSW Steel, JSPL, SAIL as well as Tata Steel have reported an increase in their crude steel output during May versus April on increased efficiency and capacity utilisation rates. For instance, JSW Steel’s capacity utilisation stood at 98% in Q1CY2022, up by 4% q-o-q.
India’s finished steel production went up by 4% to 9.729 mnt in May 2022, against 9.382 mnt in April. On an annualized basis, production increased 15% compared with 8.481 mnt in May 2021.
Finished steel consumption up 4% in May
India’s apparent steel consumption rose 4% m-o-m to 9.445 mnt in May, compared to 9.072 mnt in the previous month. The same jumped 20% against 7.858 mnt in May 2021, as per the provisional data released by JPC.
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