Indian bulk HRC exports down amid revival in domestic demand

India's bulk HRC export shipments fell by 7% m-o-m to 1.13 mn t in Jul '20 on recovery in domestic demand, according to data of twenty ports maintained by Steelmint.

Export volumes in Jun '20 were at around 1.21 mn t, a record monthly high.

Exports to China fell by 13% to 0.45 mn t in Jul '20 compared with 0.52 mn t in the preceding month. Exports to UAE fell by 64% m-o-m to 0.03 mn t in Jul '20.

However, export shipments to Vietnam jumped by 37% to 0.41 mn t against 0.30 mn t a month ago.

India's domestic steel demand increased in July after states eased restrictions on economic activities. Demand from construction and railways is improving while demand from the rural sector is also picking up.

The Indian auto sector is also improving gradually. Maruti Suzuki posted an 88.2% m-o-m increase in total sales of 108,064 units in July 2020 as domestic demand showed an uptick on the easing of coronavirus-related restrictions.

Traders and stockists have increased restocking volumes in anticipation of a further hike in prices by mills.

A large steel manufacturer plans to reduce export proportion in total sales to 15-20% by the end of December from around 55% at present.

China is also expected to gradually recover its depleted global market share of steel trade as mills ramp up output. Also, Indian exports to China may be muted due to political tensions.

Outlook- Indian steel exports in August and September are likely to shrink as mills focus on domestic demand, which is also fetching them a better realization. Indian steel exports during FY '21 (Apr-Jul) was about 4.64 mn t against 1.93 mn t during a similar period of the preceding year.