India, one of the leading exporters of steel billets, registered a 15% m-o-m fall in exports of the material in Oct’21. The volumes stood at 0.34 million tonnes (mn t) in Oct’21 as against 0.40 mn t in Sept’21, as per customs data collated by SteelMint.
China largest importer
China continued to be the largest importer of steel billets from India at 0.14 mn t in Oct’21, a marginal increase against the corresponding period last year (CPLY).
Sri Lanka emerged as the second-highest importer of steel billets from India in Oct’21 with 0.07 mn t followed by Nepal and the Philippines. Exports to Nepal stood at 0.05 mn t and those to the Philippines, at 0.03 mn t.
Exports down y-o-y in Jan-Oct’21
Exports of the material from India in Jan-Oct’21 stood at 5.11 mn t, a y-o-y decrease of 12% when compared to 5.81 mn t in the same period last year.
China was the largest importer of steel billets with 1.24 mn t (down 58%) in Jan-Oct’21 followed by Nepal and Indonesia with 0.92 mn t and 0.54 mn t, respectively.
Factors that weighed down Indian billets export bookings
- Bid-offer disparities: Higher bids for steel billets from the Indian domestic market as compared to those from China and South East Asia kept the export bookings low.
- Drop in Chinese rebar futures: Volatility in China’s rebar futures and lower domestic prices affected this country’s imports. SHFE rebar futures closed at RMB 5,515/t in mid-Oct falling from RMB 5,706/t assessed in end-Sept’21. Following the drop in futures, domestic steel billet prices in China’s Tangshan region fell to RMB 4,900/t ($767/t), inclusive of 13% VAT, towards end-Oct’21 vis-a-vis RMB 5,210/t ($816/t) assessed towards end-Sept’21.
- Iranian mills resume export offers: Also, Iranian mills have turned active in billets exports which have lowered the dependence on Indian-origin material. Restrictions on electricity consumption and widespread blackouts, which prevailed in the second quarter, affected the growth rate of steel exports. However, with easing in power supplies, export allocations by mills have improved.
Outlook
Indian billets export deals for early November shipments have cooled down a bit due to the bearish steel demand outlook in China. Steeper production cuts and volatility in steel futures are leading to the subdued demand outlook there. On the other hand, mills are getting higher domestic realisations. Thus, billet export volumes are likely to remain on the lower side in the short to medium term.
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