India: Tata Steel HRC exports may cross 1 mnt in Jan-Mar'22: sources

Integrated Indian steel producer, Tata Steel Ltd (including Tata BSL), has likely booked around 1 million tonnes (mnt) of hot-rolled coils (HRCs) for exports during the Jan-Mar'22 quarter, SteelMint learned from reliable sources.

In CY'21, the steel major had exported 1.94 mnt of HRCs (including plates) in international markets. However, in Q4CY'21, exports amounted to just 0.36 mn t.

The export tonnages increased on improved demand from Egypt, Turkey, and fresh bookings to the European Union concluded since the beginning of Jan'22. A week back, SteelMint had reported that Indian mills have collectively booked about 1.14 mnt of HRCs for Feb-Mar'21 shipments. Estimated export volumes stood at 0.55 mnt for February and 0.59 mnt for March shipments respectively, whereas the bulk HRC export data showed 0.47 mn t in Jan'22

Moreover, higher coal prices and availability issues have raised steel prices in domestic as well as global markets. The monthly average export offers of Australian coking coal (Premium HCC) stand at $443/t FOB (last assessed on 15 Feb'22), up by $32/t against $410/t FOB a month ago. In Dec'21, the same was around $340/t FOB.

A period of prolonged slow demand in the domestic market with buying interest remaining need-based since early Nov'21 has made mills a bit aggressive on the international trade platform. Also, the impact of Omicron and subsequent lockdown along with erratic rainfall in India resulted in a decline in trade activities during Nov-Dec'21. In addition, HRC prices spiked to INR 70,900/t exy-Mumbai levels in Nov'21, marking an all time high. However, the market was not able to absorb such higher prices and in Dec'21, HRC prices moved down to INR 65,400/t levels. Therefore, mills' selling interest shifted to overseas markets.

India's total steel exports were recorded at 20.44 mn t in CY'21, out of which finished flats' share was the highest in 2021, at 12.40 mnt, a 25% y-o-y increase. Tata Steel remained the 2nd largest exporter with 12% share in India's total steel exports in 2021. However, its volumes dropped 39% to 2.45 mnt y-o-y.