India: Steel billet export shipments fall 12%, m-o-m, in May’22

India, one of the leading exporters of steel billet, recorded shipments at 0.29 million tonnes (mnt) in May, a 12% m-o-m fall as against 0.33 mnt in April, as per customs data collated by SteelMint.

Kenya top importer

Kenya continued to be the leading importer of steel billets from India at 0.07 mnt in May. However, exports to Kenya witnessed a sharp fall of 56% m-o-m as compared to 0.16 mnt in March.

Nepal was the second top importer with 0.06 mnt in the month under review followed by Sri Lanka with just 0.03 mnt. Export volumes to Nepal remained stable in May. Nepal’s mills largely booked billets rather than sponge iron due to continued unscheduled power cuts in the country, leading to a temporary shutdown of several furnaces.

Exports down in January-May

Indian billet exports in January-May 2022 stood at 1.37 mnt, a sharp y-o-y fall of 39% compared to 2.25 mnt in the same period last year.

Factors weighing down Indian billet export bookings-

• Bid-offer disparities: Higher bids for steel billets in the domestic market (than those from the key importing nations like China and South East Asia) kept export bookings low. Almost no firm bids for imported billets were heard from these countries which kept trades at bay.
• Cost-effective offers from CIS: Russian billets (130x130mm, 3SP) export offers fell to $680/t FOB Black Sea in May from $730/t FOB levels towards end-April.
• Higher realisations in domestic finished steel market: Indian mills raised long steel prices sharply between mid-March to mid-April. SteelMint’s BF-route rebar price assessment rose to INR 72,900/t ($935/t) exy-Mumbai in mid-April from INR 72,000/t ($923/t) exy-Mumbai in mid-March. Thus, higher domestic finished long steel prices kept price expectations on the higher side even for billet export bookings. Indian mills were not ready to reduce billet offers considering the high input costs.

Outlook

Indian billet export market is expected to remain sluggish in the days to come as BF-grade steel mills are concerned about lowering their export prices owing to high input costs. Meanwhile, with monsoons approaching in India, long steel demand may further remain subdued.