Global seaborne steel export trade falls by around 15% y-o-y in 2022

• Steel exports from China stable, remains top exporter
  
  
• India slips to 11th spot among global steel exporters from 6th in 2021
  
  
• Sharp fall in shipments from Russia, Ukraine, Turkiye
  
  

Morning Brief: Global seaborne steel export trade in 2022 dropped around 15% y-o-y to over 288 million tonnes (mnt) from around 337 mnt in 2021, as per data collated by SteelMint. Volumes shrunk in 2022 due to considerably lower shipments from Russia, Ukraine, India and Turkiye due to the ongoing armed conflict in Europe and loss of steel production and demand in key countries owing to inflation, rampant currency volatility and economic recession.

The global steel export figures have been collected from 20 countries that contribute to over 90% of world crude steel production and 85% of world trade, as per estimates.

Leading exporters
The leading exporter in 2022 was undoubtedly China with over 67 mnt, followed by Japan at 28.7 mnt and South Korea at 23 mnt. Weak domestic demand and subdued steel margins was one reason why Chinese mills remained active in exports. While steel production in China fell by 1.4% in January-November 2022, the revenues of steel companies plunged over 90%. Japan and Korea witnessed decline in volumes due to subdued global demand amidst inflation and currency depreciation as well as continued disruption in the supply of key components used by the downstream sectors.

Sharp fall in shipments from Russia, Ukraine
Exports from Russia dropped over 30% in 2022 to around 20 mnt from over 30 mnt last year. The export of steel and iron ore is unprofitable for almost all Russian steel companies, as per latest investment bank reports. In addition to sanctions, the profitability of the export of steel products and raw materials remains affected due to expensive logistics and the strengthening of the ruble. A few producers that show positive export margins have been able to continue deliveries of semi-finished steel products to the European market.

The EU currently has sanctions on ready-made rolled products from Russia. These products are subject to quotas, and due to their redistribution among other countries, it was possible to stop imports from Russia. Russian steel companies continue to freely supply semi-finished steel products, pig iron, and iron ore to the EU, GMK Centre reports. While the import of semi-finished products is planned to be limited gradually, there are no such plans for pig iron and iron ore.

Ukrainian exports plummeted nearly 70% in 2022 due to the devastating impact of the war on steel production, logistical operations, especially key ports, and supply chain breakdown.

India's exports down almost 45%
Interestingly, exports by India dropped around 45% y-o-y to 10.19 mnt from over 18 mnt in 2021. India slipped to the 11th spot among major steel-exporting countries this year from the 7th position last year. This was mainly due to the 15% duty slapped on steel exports in May this year, which resulted in a massive decline in volumes due largely to unviability vis-a-vis the domestic market. Exports also fell partly due to strong domestic demand, with the 10% y-o-y growth in steel production in January-November and the 18% uptick in steel imports this year.

Lower shipments by Turkiye
Steel exports by Turkiye fell by over 20% on the year to around 16 mnt from over 20 mnt in 2021. The share of electricity and natural gas in industry costs increased from 8% to 30%, according to the Turkish Association of Steel Producers (TCUD). This has led to a significant decrease in the competitiveness of the Turkish steel industry on the domestic and foreign markets and a reduction in production, which affected export performance. As per TUCD estimates, the level of capacity utilization has decreased to 60%. The country's steel production in January-November 2022 decreased by 12% y-o-y to around 32 mnt.'

Globally, the most-traded steel commodity was hot-rolled coil (HRC), which had a share of 15% of total exports, followed semi-finished steel products at 13%.