India: EU sales boost JSW Steel exports in Jan-Jul'21

Private steel major JSW Steel reported a 7% y-o-y increase in its steel exports in Jan-July'21 compared the same seven months in CY'20. Volumes in Jan-Jul'21 rose to 3.4 million tonnes (mn t) compared to 3.13 mn t in Jan-Jul'20, as per data maintained with SteelMint.

On a m-o-m basis, exports rose around 8% against 0.59 mn t in Jun'21. The exports in Jul'21 are the second-highest this year, after 0.78 mn t seen in Mar'21.

However, these figures do not include the export data of JSW Steel's acquired companies Bhushan Power and Steel, Monnet Ispat and Asian Colour Coated.

Total exports of JSW Steel in entire CY20 were at 4.17 mn t.

Over Jan-Jul'21, flat steel exports rose by 19% to 2.61 mn t against 2.20 mn t in the corresponding period last year (CPLY). Long steel exports surged 137% to 0.45 mn t in Jan-Jul'21 compared to 0.19 mn t in CPLY while semis (billets) exports showed a marginal dip at 0.30 mn t against 0.74 mn t in CPLY.

EU countries' share highest

Exports to the European Union comprised the major chunk of JSW Steel's exports in the first seven months of the current year at 1.72 mn t. Exports to Belgium were the highest at 0.12 mn t, followed by Italy, at 0.09 mn t. Exports to both these countries remained flat m-o-m in July over June.

Exports to Vietnam, a key flat steel importer from India, rose to 0.09 mn t compared to 0.02 mn t in June.

Why did exports to EU rise?

The Indian steel mills had exported in huge quantities to beat the sluggish domestic demand that was a result of the second Covid surge in India. EU countries, on the other hand, were better placed than India. Their economies were opening up after a rapid vaccination drive and steel demand was high. JSW Steel's figures also point to this trend. Indian mills' export bookings made around April-May continued to be shipped till July, SteelMint understands.

In fact, Indian mills exhausted their full quota to Europe in the first five months of the current year. The maximum volumes mills could export to EU in CY'21 was 2.50 mn t. However, data maintained with SteelMint reveals Indian mills jointly overshot this by almost 7% to 2.67 mn t.

Short-term outlook

The exports outlook is dull at present. Exports to EU looks bleak because of the exhausted quotas. Even if mills export beyond the quota, they may come under Europe's anti-dumping scanner.

Secondly, South East Asian economies, especially Vietnam, are taking a hit from Covid-induced lockdowns. In fact, mills in Vietnam themselves are scouting for export bookings.

Demand from China is weak because of production cuts, bad weather and uncertainty over policy decisions.

Therefore, export sales may be weak in the short term.