India's steel exports revive to fall flat m-o-m in Oct'24. China factor continues to worry

• Volumes to EU stable amid dumping probe
  
  
• Chinese pricing continues to pressure offers
  
  
• Bumps ahead in overseas sales for Indian mills?
  
  

Morning Brief: India's steel exports provisionally emerged flat m-o-m in October 2024 at 0.58 million tonnes (mnt) when pitted against the September levels.

However, when the first 7 months (7FY'25) of the fiscal year were considered (April-October, 2024), volumes fell a sharper 25% to 3.49 mnt against 4.64 mnt in the same 7MFY'24.

Country-wise break-up

The EU continues to be India's leading destination but volumes were stable m-o-m at 0.29 mnt. Exports to Vietnam remained plunged at a mere 1,000-odd tonnes but Nepal offered steady support, up 9% m-o-m to around 73,000 t. The Middle East took the fourth slot at 52,600 t, rising a nominal 4%.

Factors that impacted exports in Oct'24

China's Sept stimulus hikes global prices: China's stimulus measures unveiled in the third week of September, 2024, aimed to revive the ailing property sector. Gripped by an initial euphoria, the steel market in China responded positively. Prices rose in a knee-jerk reaction. The rest of the world followed. China's HRC offers spurted north by over 12% m-o-m in October to $519/tonne (t) FOB, its highest in four months. The Japanese were more cautious, though, raising theirs by only $7/t to $497/t FOB. Russian quotes upped 5% to $496/t FOB. China's Baosteel, the largest steel producer globally, increased HRC prices by RMB 500/t ($71/t) m-o-m for November 2024 sales.

Vietnamese mills too did not want to be left behind. Hoa Phat and Formosa upped their October offers by 6-7% to $550/t CIF HCMC.

Indians resume offers but, China a spoilsport: Indian mills and traders too were not keen to miss this October fest. They resumed offers from end-September. In October, the BigMint India HRC export index revived after a six-month gap at $535/t FOB east coast. An Indian steel major booked 20,000-25,000 t of HRCs for the Middle East (ME). However, on the downside, Indian offers came under Chinese pressure, falling $10/t w-o-w in end-October to $560/t CFR.

Chinese offers, after the stimulus cheer had subsided, kept their offers to ME stable at $530-535/t FOB but which were lower from the Indians by $35-40/t, impacting the revival story.

EU goes slow amid dumping probe, firmer offers: Another factor behind dull October volumes was the European Union, India's leading importer since Covid. India has utilised only 3% of its HRC quota for the October-December quarter as exports to Europe were hit by weak demand and the EU's anti-dumping probe launched in August. In fact, the European Commission started registering all HRC imports from Egypt, India, Japan and Vietnam, paving the way for a potential retroactive application of anti-dumping duties, as per a notice in the Official Journal of the European Union on 25 October.

Plus, end-users found the Indian offers too high at around $590-595/t CFR Antwerp last month against local offers that hovered in the vicinity of $576/t amid discounts and bulk orders.

It may be noted, India's quarterly HRC and strip quota for July-September 2024 and October-December 2024 were at 301,704t each and for January-March 2025 and April-June 2025, around 295,145t and 298,424t, respectively.

Vietnam battles steel dumping: Demand from Vietnam has dwindled from April due to a few reasons. First, this Southeast Asian country is itself battling steel dumping by China and recently extended the anti-dumping duties on colour-coated steels from here and Korea. Chinese steel exports to Vietnam rose 46% over January-August and January-September, 2024. Secondly, Vietnam launched anti-dumping investigations against HRC exports from China and India in August, limiting imports. Thirdly, its steel exports to the EU, as with many other countries, have been hit by the EC's extended safeguard measures till 2026. Vietnam's major steel importing markets included ASEAN and the EU, with 3.5 mnt and 2.55 mnt last year, respectively, as per a report.

Outlook

Uncertainty will cloud India's steel exports going forward because of several reasons. One will be the continued pressure from Chinese steel prices. The second high-profile stimulus package also failed to get the desired impact, which may ensure that the exports onslaught will continue at predatory pricing for some more time. If US tariffs target China then other importing countries will face a greater dumping deluge. Secondly, the increasing global trend of protectionism will ensure most exporting countries remain impacted by dumping duties so that their domestic mills benefit. Thirdly, geopolitical events will keep demand subdued globally.