Indian Flat Steel Exports Nearly Doubled on Absence of Chinese Supplies

Indian flat steel exports volume increased two-fold in CY17. Nation’s export volumes witnessed growth of 88% to 9.41 MnT in CY17 which was 5.04 MnT in CY16.

Indian flat steel exports to Vietnam increased five-fold-Out of 9.41 MnT flat steel exported in from India in CY17, Vietnam accounted for 18% share (1.64 MnT) followed by Italy at 1.46 MnT and Belgium at 1.09 MnT. Other major importers were UAE and Spain.

Vietnam’s import increased to 1.64 MnT in CY17 against 0.35 MnT in previous year. Imports by Italy and Belgium increased 192% and 38% Y-o-Y in CY17.

Indian HRC exports increase three-fold in CY17-India exported 5.46 MnT HRC & plates in CY17 compared to 1.69 MnT in previous year. CRC exports from India increased to 1.52 MnT in CY17 over 1.09 MnT in previous year.

Fig in MnT
Source: SteelMint Stats

Why Indian flat steel exports increased sharply ?

1. Absence of Chinese steel supplies – Amid winter production cuts to curb excess steel capacity,export volumes also moved down. In CY17 nation’s finished steel exports volume decline by 30% to 75.41 MnT against 108 MnT in CY16. Reduced exports from China gave Indian mills an opportunity to cater to the overseas markets.

2. Improved realization in export market-Major mills in India acquire higher realizations from flat steel exports in overseas market.On yearly average basis Indian HRC export offers stood at USD 510/MT, FoB India in CY17,increased by 37% against CY16.

3. Increase in crude steel Production leads to growth in export volumes-According to provisional data released by Joint Plant Committee (Govt. of India) India has set a new record for the first time by registering crude steel output at 101.2 MnT registering a growth of 5.87% in CY17 as compared to CY16.

What may happen in 2018?

1. EC initiation of safeguard investigation – European Commission (EC) has initiated safeguard investigation on imports of steel products from countries like US, India etc. If announced, this may impact Indian market as Italy and Belgium are major destinations for Indian flat steel exports

2. Upcoming steel capacities in Vietnam – Formosa Hoa Tinh is having an annual capacity of 3.5 MnT. Within a year, the company is set to open second blast furnace, doubling its crude steel making capacity to 7 MnT.The second blast furnace is expected to become operational in May-June 2018 and this will allow company’s plant to produce 5.2 MnT of flat steel, primarily hot-rolled coil and hot-rolled band.Thus flat steel capacities in Vietnam are expanding which may limit exports from India.

However Indian mills will try to push export volumes over increasing production. Thus is will be interesting to see how Indian flat steel export market reacts in CY18.