- Volumes to China highest but plunge y-o-y
- US, Turkey emerge as key markets
- Rising capacities in US to supports pig iron demand
- Vedanta, JSPL largest exporters of pig iron
- Russia-Ukraine absence to help Indian exporters
Morning Brief: India’s pig iron export shipments were recorded at 1.07 million tonnes (mnt) in FY22 (April 2021-March 2022), almost stable y-o-y compared to the previous fiscal year, data maintained with SteelMint shows.
The volumes remained supported by increased shipments to the US and Turkey on strong demand despite a noticeable decline in exports to China amid production curbs.
China largest importer but volumes plunge
China was the largest importer of Indian pig iron at 0.25 mnt in the period under review. However, the volumes fell by more than half y-o-y against 0.52 mnt last year (FY21).
China, the world’s biggest steel producer, had imposed stringent production cut measures to-
(i) keep its CY21 steel output lower than that of CY20’s which was over 1 billion tonne (bnt)
(ii) achieve a clear sky before the Winter Olympics.
Also, China’s imports surged in CY’20 on strong demand as a result of the economic rebound since Mar-Apr’20, at a time when most other major economies around the world had been paralysed by the pandemic. The situation, however, changed dramatically in 2021. Thus, pig iron demand among Chinese steel producers decreased, resulting in a drop in its imports.
Rising demand from US, Turkey
Interestingly, the United States emerged as the second largest pig iron importer from India last fiscal at 0.21 mnt, higher by 320% y-o-y.
The US is reportedly planning to increase its market share in electric-arc furnace (EAF) steelmaking to 80-85% in 2025 with an additional 14 mnt capacity to be announced in 2024. Thus, with increasing capacities, the country has scaled up pig iron imports as well to cater to its rising demand.
Turkey was the third largest importer at 0.14 mnt in FY22. Amidst reduced exports from Russia after the government imposed tariffs on pig iron exports, its major buyer, Turkey, looked towards other key exporting countries to source the raw material. Indian exporters also took the opportunity to supply to the new market.
Also, as the Russia-Ukraine war broke out in late-February, both US and Turkey turned to other key suppliers like Brazil and India.
Notably, Russia is the largest exporter of pig iron while Ukraine is the third largest. Both the countries constitute around 54% of the global trade.
Vedanta, JSPL largest exporters
Vedanta Limited, one of the leading pig iron players in India, stood as the top exporter with 0.4 mnt in FY22, a rise of 74% y-o-y as compared to 0.23 mnt in the previous fiscal.
The company’s exports rose on the back of increased production last fiscal. According to latest report, Vedanta produced 790,000 tonnes (t) of pig iron in FY22, higher by 33% y-o-y due to better operational capacity of its furnace after capital repairs in FY21. Also, FY21 production was impacted by nationwide Covid-19 lockdowns.
JSPL, which was the largest pig iron exporter in FY21, slipped to the second position in FY22. The company exported 0.21 mnt, down by 50% y-o-y.
Outlook
As the major suppliers, Russia and Ukraine, are out of the market, India – with a surplus production of 4.5 mnt – is poised to cater to the major consumers like the EU, the US and Turkey in the current fiscal year, SteelMint notes.
As per latest reports, around 300,000 t of pig iron from India were booked to the US since mid-February 2022, the shipments of which are scheduled in April-May.
Surprisingly, India’s pig iron export prices have spiralled up to $820/t FOB east coast in mid-Apr, an increase of 25% since early-Mar.
Similarly, export prices of Brazil, one of the top pig iron suppliers in the world after Russia and Ukraine, have also jumped to $935/t FOB levels in mid-Apr which were at around $650/t in early-Mar.
However, India’s exports to China may remain low as the country will continue with its production control measures this year too.
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