India: Merchant pig iron production falls 11% in FY'21

India's merchant production of pig iron stood at 4.8 mn t in FY'21, down 11% from 5.4 mn t in FY'20. As per SteelMint assessment, the largest producer was state-owned Steel Authority of India Ltd (SAIL) with 0.63 mn t of merchant pig iron output followed by metals major Vendanta Resources at 0.6 mn t.

While Kirloskar Ferrous Industries produced 0.35 mn t of pig iron in FY'21, Tata Metaliks churned out 0.3 mn t. Merchant production by integrated steel majors JSW Steel and JSPL stood at 0.24 mn t and 0.29 mn t respectively.

Covid-19 impact on production

The nationwide lockdown following the coronavirus outbreak in end-Mar'20 impacted manufacturing and demand for metallics. As a result, merchant pig iron production was affected in Q1 FY'21 and beyond, while demand remained subdued.
Out of the total merchant output of 4.8 mn t in FY'21, production of steel grade pig iron was assessed at 3.65 mn t. Foundry grade pig iron accounted for the rest 1.15 mn t, as per SteelMint data.

Exports jump 170%

Interestingly, India's pig iron exports recorded a dramatic rise of over 170% in FY'21. Total exports stood at 1.03 mn t compared to 0.38 mn t in the previous fiscal. Although Covid-19 had destroyed domestic demand in H1 FY'21, continuous process industries such as steel had to remain operational, even during the lockdown. Blast furnaces cannot be banked at short notice and so production continued in the absence of demand.

Therefore, steel mills turned to exports for sustenance and disposal of inventory and a big share of India's pig iron exports in FY'21 - about 40-50% - went to China. Post-lockdown demand in China had rebounded, especially since Apr'20, while domestic supply was yet to catch up.

China apart, other destinations for Indian pig iron exports were Italy, Bangladesh and the US. However, volumes were no match to those of China's.

JSPL led from the front with 0.38 mn t of pig iron exports in FY'21. Vedanta recorded exports at 0.23 mn t and JSW Steel at 0.17 mn t. Rashmi Group joined the exporters' club in FY'21 with 0.10 mn t of overseas pig iron sales even as state-owned RINL posted a net 109% rise in exports to 0.06 mn t in FY'21.