- Flat steel shipments drop 20% m-o-m in May
- Exports to the EU down 21% m-o-m on soft demand
- High Chinese supplies, trade tensions affect export prospects
Morning Brief: India’s steel exports, including stainless steel, edged up marginally in May 2025 by 1.33% m-o-m to 0.735 million tonnes (mnt) compared with 0.725 mnt in April, as per provisional data with BigMint. Although export volumes have witnessed a minor improvement since January-February, subdued global demand, trade uncertainties and stiff competition from major steel exporting countries seem to be weighing on market sentiments.
Data show that exports of flat products actually declined by over 20% m-o-m to around 0.41 mnt compared with 0.53 mnt in April, with the share of flats in total exports standing at around 57%.
The marginal increase in exports was due to the surge in billet sales overseas, with volumes rising from around 76,000 t in April to over 180,000 t in May.
Stainless steel exports increased marginally in May to over 78,000 t.
Country-wise exports
Steel exports to the EU, India’s major destination, dropped 21% m-o-m in May to around 0.28 mnt from 0.35 mnt in April, as per data.
Exports to the UAE witnessed a sharp decline, while shipments to the US decreased considerably since March. Interestingly, exports to the UK have gathered pace post the India-UK FTA deal.
Steel exports scenario in May
Exports to EU drop 21% m-o-m: Indian flat steel trade with the EU remained slow due to holidays in certain regions of Europe and market uncertainty. Demand from the automotive and construction sectors remained slow. European buyers continued to prefer more competitive and readily available local options.
HRC prices in the EU are touching a new low and the reasons are sluggish demand, fierce competition among producers, and active import offers. Customers are avoiding new purchases, expecting further price declines. Service centres in Italy have excess stocks and are purchasing only selectively.
Another deterrent is the uncertainty surrounding the CBAM mechanism. Most buyers are not ready for over-the-counter contracts due to a lack of clarity in regulation, according to a report by GMK Centre.
All these factors explain why, despite a lot of unutilised HRC quota in May, demand for imported flats in the EU remained lacklustre.
Mills withhold offers for Middle East: Indian mills are not offering to the Middle East due to competitive offers floated by Chinese suppliers and higher domestic realisation. Chinese HRC offers to the Middle East remained rangebound throughout March. Demand remains stable ahead of Eid al-Adha in the Middle East, a source informed. However, Indian mills are not actively offering due to China’s overbearing presence.
Chinese steel exports up 10% y-o-y in May: In May, China’s steel exports continued their upward trajectory, rising by 10% y-o-y and 1% m-o-m to over 10.5 mnt.In January-May 2025, China increased exports by 9% y-o-y to nearly 50 mnt.
Gradually deteriorating steel prices in China’s domestic market have naturally had an impact on export prices. BigMint data show that Chinese SS400 HRC export prices have decreased by around $25/t on FOB basis over the past three months. As Chinese steel export prices become more competitive in the global market, other suppliers such as India are being gradually edged out.
Outlook
With global demand for steel continuing to remain bleak due to oversupply and trade tensions, India’s export prospects may not seem bright. As India’s biggest importer of steel, the EU will remain in focus. A potential trade agreement with the US will go a long way in restoring confidence and consumer sentiment in the EU.
In addition, if Chinese steel production decreases gradually in H2CY’25, a widespread recovery in global steel prices may be expected. Steel buyers in the EU, in such a scenario, will be able to convert CBAM costs into prices and so demand may recover.
In traditional exporting geographies such as the Middle East and Vietnam, super-competitive Chinese offers and growing domestic steel capacity will continue to restrict exports from India. However, exports to the UK are expected to increase further in the coming months as the FTA comes into full force.
Leave a Reply