Indian steel exports hit over one-year high in Aug'21
Indian steel exports in Aug’21 were at 2.58 million tonnes (mn t), a 7% m-o-m rise over Jul’21, as per data maintained with SteelMint. But, more importantly, ...
Indian steel exports in Aug'21 were at 2.58 million tonnes (mn t), a 7% m-o-m rise over Jul'21, as per data maintained with SteelMint. But, more importantly, these volumes are the highest-ever since Jun'20.
Why have exports gone up m-o-m?
- Market expectations were that August exports would be lower compared to the previous month. However, it seems, a lot of material, which had been booked in Jun-Jul'21, was lying at Indian ports because of vessel and container issues. These got cleared in August, inflating the export figures in the process."The bookings in July were actually lower. The August cargoes were a spillover from June-July, leading to the highest ever export volumes of 2.58 million tonnes," said a source.
- India registered a 15% m-o-m rise in billet exports in Aug'21 at 0.84 mn t. Chinese steel production curbs kept demand for imported billets high. Rise in re-bar futures and higher Chinese domestic prices also supported imports.
- The power crisis in Iran, a major billets exporter, made Iranian mills hold back export allocations, which helped Indian semis exports.
Flats' share highest
Out of this 2.58 mn t, the highest share belongs to flat steel, at 1.40 mn t. Semis were at 0.84 mn t with long steels bringing up the rear 0.34 mn t.
Country-wise break-up
China led the importing countries with 0.33 mn t, followed by Italy (0.29 mn t), Vietnam (0.25 mn t), Nepal (0.16 mn t) and the UAE (0.15 mn t).
Exports to European countries cumulatively amounted to around 0.7 mn t. Although Indian mills have exhausted their entire year's quota to Europe in the very first five months of CY'21, the bookings made in June-July got delivered in August, leading to the inflated numbers. In fact, cumulatively, as a continent, Europe leads the imports list, although, China, as a standalone country, stands first, with 0.33 mn t.
As with Europe, bookings to Vietnam too had been made earlier but got delivered in August. In August, Vietnam, along with South East Asian countries, showed a subdued booking trend in exports because of the Covid-induced lockdowns.
"We expect export volumes from Vietnam to be lower in Sept-Oct'21 because bookings in August were muted," observed a source.
Outlook
Exports in Sept-Oct'21 are likely to be less because the buying trend from Vietnam and South Asia has been subdued, while most of the deliveries to Europe would have been made. China too has not been showing much appetite in September for overseas buying because of its production cuts and strict inspection regime.
While exports will be buoyant, SteelMint does not foresee these to be as high as in the previous months.
Moreover, some key Indian mills were under maintenance in Aug-Sept, which will further reduce export allocations, although this will not impact prices.
China is focusing more on its domestic market, with production curbs, export disincentives and a strict inspections regime. Such measures will help boost Indian steel exports in the medium-to-long term. "But, in the short term, exports are likely to be lesser compared to what we have seen in the last few months," said a trade source.
However, SteelMint would not be surprised if total export volumes for the full fiscal year of FY'22 cross 20 mn t. Total exports in FY'21 were at around 19 mn t. Overseas sales have already crossed 10 mn t in the first five months of the current fiscal and in the balance seven months, even if the monthly rate does not sustain, volume will likely cross 20 mn t.