India: RINL Jul'21 steel exports lighten inventory load

State-owned Rashtriya Ispat Nigam Limited (RINL) posted improved performance in Jul'21 across all parameters, compared to the previous month, in keeping with the overall slight positive trend seen in the industry during this period.

The long steels major, importantly, was able to bring down its closing stock in Jul'21 by almost 56,000 tonnes m-o-m against an inventory increase of 1.02 lakh tonnes seen in Jun'21. For instance, its Jul'21-end closing stock dropped to 3.44 lakh tonnes against more than 4 lakh tonnes seen in Jun'21-end, a m-o-m decline of 14%.

Exports

Mills overall were able to liquidate inventory through exports in good amount last month, domestic sales being sluggish. And RINL was no exception, also having sold considerable volumes in the overseas markets, which eased some of the selling pressure. It may be recalled, in June, mills, weighed down by a Covid-induced subdued market, had been battling almost a full month's stockpile.

RINL's export sales in Jul'21, mainly of billets, thus, surged by a whopping over 230% to 1.61 lakh tonnes against Jun'21's 48,000 tonnes. Export prospects in June had turned bleak because of lack of vessels, high freights, quarantine issues at ports etc, which had dented RINLs overseas sales too in that month.

Consequently, thanks to the exports push, total sales in Jul'21 rose a chunky 77% to 5.41 lakh tonnes compared to 3.06 lakh tonnes in Jun'21.

Crude steel output

Meanwhile, crude steel production in the month under review rose 10% m-o-m to 4.86 lakh tonnes against Jun's 4.41 m-o-m.

Turnover also increased by around 68% to INR 2,800 crore in Jul'21 compared to INR 1,671 crore in the previous month.

New stockyard in NE

Meanwhile, the PSU steelmaker has opened a new stockyard in Guwahati to cater to the North-East market. Quality products manufactured at RINL's Vizag Steel Plant (VSP) will be made available to buyers in the North-East through this stockyard. The first rake, loaded with VSP's steel products, arrived at the yard on 26 Jul'21 and was handed over to Larsen & Toubro ECC Group, as per reports.

Outlook

RINL is looking at a total exports volume of 15 lakh tonnes compared to last fiscal's 13 lakh tonnes, a company source informed SteelMint. However, achieving the target depends much on how the domestic and global factors play out, the source reminded. Even a small policy decision taken by China impacts global trade. It recently did a major rethink on production cuts, which has made steel futures and spot prices swing down. "The last fortnight or so, we have seen China desisting from taking material from India. So, the export volumes are a factor of global developments," the source stressed.

"That apart, the quarantine period had been raised to 28 days from the previous and this is still sustaining, which is raising the landed cost of exports," the source rued.

Moreover, with Covid cases rising in China it will be cautious, and South East Asia still facing lockdown, exports from India will be subdued for some time.

Prices as on 9:00 IST, 09 Aug. d-o-d changes indicated against closing price of 06 Aug.