Indian bulk HRC export shipments fall for the second consecutive month in Jan '21

Indian bulk HRC export shipments continued to fall for the second consecutive month, as per the bulk export shipment data maintained with SteelMint.

In Jan '21 the export volumes declined by 36% to 228,599 t as compared to 355,399 t in Dec '20.

Indian manufacturers shifted to focus on domestic sales from Jul '20 onwards on higher price realizations and robust demand from the auto and consumer durable sector.

SteelMint analyses few factors on fall in bulk HRC export volumes-

• Mills raised HRC prices twice in Jan '21- Mills began increasing their list prices on the back of firm downstream demand in contrast with short supplies. The mills made the price announcement twice in the list price of HRC by INR 5,000-5,500/t in Jan '21. Thus, focus on domestic sales reduces export volumes of HRC in Jan.
  
  
• Robust domestic demand- Consumption of automobiles by end-users has grown in double-digits owing to the rising need for a personal mode of travel over shared mobility or public transportation. Sales in Jan '21 was at 3,03,904 units, up 16% y-o-y against 2,62,226 units sold in Jan '20 and higher by 10% m-o-m compared to 2,75,858 units sold in Dec '20.
  
  
• Limited exports to Vietnam- Vietnam was the most preferred destination for Indian steel exports. However, with the revival in the Indian economy post lockdown, Indian steel mills have refrained from exporting HRC to Vietnam. Mills have deferred their HRC export shipments to Vietnam on resumption of domestic demand. Secondly, mills were unlikely to offer HRC to Vietnam at competitive prices.
  
  

Major steel mills have reported a decline in export volumes in Q3 FY '21 results-

• JSPL reported a 21% drop in export volumes in Q3 FY'21 as domestic demand continued to recover, the company raised its sales within India.
  
  
• JSW steel recorded around 12% decline in its export volumes to0.47 mn t as the focus was on catering to domestic supplies.
  
  

Country-wise HRC export shipments- Bulk HRC export volumes to Vietnam were slashed by 48% m-o-m to 39,609 t in Jan '21 contrasted against 76,165 t in Dec '20. Further, export volumes to Italy declined by 20% to 1,03,950 t in Jan '21 m-o-m.

Port-wise HRC export shipments- Shipments from Paradip port and Chennai port have dipped by 41% and 38% respectively. However, there were no shipments made from Dhamra and Hazira port in Jan '21.

Company-wise shipments- JSW steel exported around 163,969 t in Jan '21. Next in line was Tata Steel with 17% share at 39,609 t, followed by JSPL with 6% share at 14,626 t. SAIL accounted for 3% share in total exports at 6,827 t in Jan '21.

Outlook- Mills may increase export allocations in Feb-Mar '21 as we can see some resistance at current levels.