India’s finished steel exports fell by 6% m-o-m to 0.33 million tonnes (mnt) in November 2022 in contrast with 0.36 mnt a month ago. In similar lines, export volumes plunged by a steeper 53% y-o-y against 0.72 mnt seen in November 2021, as per provisional data released by the Joint Plant Committee (JPC).
During April-November, 2022, export volumes declined by 55% y-o-y to 4.299 mnt from 9.531 mnt in the same period last year.
Why did exports plunge?
- Subdued overseas demand: Indian mills continued to face challenges, post-the export duty imposition, within the traditional exports markets of Middle East, Vietnam, and Europe. These were the markets where Indian mills had booked good volumes in the past few years. Furthermore, sluggish performance of the construction sector and lacklustre trade on the global platform continue to weigh on the demand for imported HRCs from Vietnam. This, in turn, resulted in production cuts by Vietnamese mills which later started actively scouting for export orders to ease off inventories.
- China captures Middle East export market: The Middle East export market that India had vacated has been taken over by China and market participants opine it will be a bit difficult to recapture the same. Following the imposition of the export duty in May, total mill-level stocks have increased 20%. On the other hand, Chinese exports to the Middle East market which India had to relinquish because of the duty increased by 22%.
Crude steel production dips 1% m-o-m in Nov’22
Crude steel production by Indian mills stood at 10.335 mnt in November, marginally down 1% from 10.451 mnt in October 2022. On an annual basis, crude steel output rose by 5% compared to 9.877 mnt a year ago.
The major primary mills operated at a lower capacity even after being shut down for maintenance for most of the July-September period. Secondary mills also operated at lower capacity. Of the primary mills, those producing via gas were under pressure while the secondary mills were bracing for a rise in pellet, sponge and scrap prices.
During April-November, crude steel output rose 6% y-o-y to 81.889 mnt against 77.586 mnt in the same period last year. The mills were starting to improve the output volumes gradually in November last year. It can be recalled that in April-October, 2021 there was a diversion of oxygen for medical purposes during the Covid emergency which had led to a drop in production.
Finished steel production drops 4% m-o-m in Nov’22
India’s finished steel production stood at 9.549 mnt in November, dropping 4% m-o-m as against 9.980 mnt in October. However, on a yearly basis, production rose 3% as compared to 9.234 mnt in the preceding year.
Finished steel production increased by 6% y-o-y to 77.721 mnt during April-November as against 73.021 mnt in the same period last year.
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