Indian bulk HRC export shipments fall further on higher domestic consumption in Dec

Indian bulk HRC shipments fell by 25% to 284,535 t in the month of Dec ’20, as per the data maintained with SteelMint. The export volumes were at 381,428 t a month ago. Improved demand for upstream finished-flat steel products has resulted in lower exports of substrate HRC in the past few months.

During the 9M FY ’21 (Apr-Dec), bulk shipments aggregated to 5,873,908 t, steeply up by 45% as against 4,063,686 t CPLY on the back of higher volumes exported during the Apr-Jul period.

Reasons for decline in HRC export shipments-

• Hike in list prices by mills- Major Indian mills had started increasing their domestic list prices in rapid succession since Sep ’20. The mills in two announcements had hiked HRC list prices by INR 2,000-2,250/t in Nov ’20 followed by a steep surge of around INR 7,000-7,500/t m-o-m in Dec ‘20 in five announcements. Firm downstream industrial demand with higher realizations and tight supplies remained lead factors for the price hikes. Meanwhile, SteelMint had also learned of supply constraints with the mills running maintenance or being under purview of expansion plan during the month.
• Buoyant sales in the auto sector- Major automobile brands in the country posted positive domestic sales figures in Dec ’20 vis-à-vis Nov ’20. As per FADA, the auto-registration numbers have been consistently increasing since Jun ’20. Also, total auto sales across categories increased by 11% to 18,44,143 units in Dec ’20 compared to 16,61,245 units in Dec ’19.
• Construction and Infrastructure sector boost- With the resumption of halted projects and a flurry on new infrastructure projects announced in Dec ’20, the demand for HR coils jumped in the domestic market. Further, the optimism seeped into the allied industries viz OEM along with the heavy machinery which are also showing a gradual increase in demand in the domestic market.

Country-wise HRC export shipments- Bulk HRC export shipment volumes to Vietnam fell off by 22% m-o-m to 76,165 t in Dec ’20 against 97,654 t a month ago. On the other hand, exports to Italy spiked up by 35% to 93,608 t in Dec ’20 compared to 69,413 t in the preceding month.

Port-wise HRC export shipments- In Dec ’20, HRC export cargoes have registered a whopping 137% growth at Dhamra port to 71,000 t. Shipments from Hazira port increased by 11% to 92,258 t in Dec ’20. On the other hand, Paradip port reported a decline of 49% to 56,165 t Dec ’20.

Outlook- The domestic demand for HRC and plates is poised to remain strong on the back of optimistic outlook in the market. Automobile sales in India are anticipated to grow in double-digits in 2021, while a surge in construction and infrastructure activities could be seen with increased government investment in these sectors, which is going to keep the demand supported for the upcoming months.