India's Steel Exports Up 23% in 2019

India's steel exports saw an increase of 23% in CY19 compared to the figure in 2018, according to data maintained by SteelMint.

Steel makers shipped around 13.06 MnT of steel products (longs, flats and semis) in CY 2019 against 10.64 MnT in 2018. In this corpus, the share of flats was 8.35 MnT, long products were at 0.95 MnT and semis' share was at 3.71 MnT and included pig iron and sponge iron as well.

Against this, the break-up for 2018 comprised 6.42 MnT of flats, 0.9 MnT of longs and 3.3 MnT of semis. Consequently, in 2019, flats were up 30.06%, longs moved up 5.5% and semis were also up by 12.42% respectively.

What drove steel exports?

Chinese buying supported Indian exports in the second half of 2019. As per data, China imported 0.52 MnT of steel items, mainly billets, in 2019 against 0.02 MnT in the previous calendar.

However, it was mainly Vietnam, Nepal and Italy which pushed up exports in CY2019 in terms of volumes. In terms of the highest percentage growth as well as volume, Vietnam reported the highest imports at 2.36 MnT during the period against 0.48 MnT in CY18, a whopping 394% rise, followed by Sri Lanka, whose imports increased 76% in CY19 to 0.37 MnT against 0.21 MnT in CY18. Italy's imports, at 1.32 MnT, showed a growth of 55% Y-o-Y.

Nepal's imports, in volume terms, were in second place at 2.03 MnT in CY19, but these were actually down from 2.22 MnT in CY18.

Subdued domestic demand

The increase in steel exports from India was a result of subdued domestic demand and higher production in the year 2019 which goaded steel makers to look at markets outside India. One key reason was low auto sales in 2019 on the back of the NBFC crisis and other factors like low liquidity in the hands of the consumers and preference for app cab services.

As a result, according to Joint Plant Committee, India's crude steel production rose only a modest 2.74% to 108.70 MnT in CY19 against 105.80 MnT in CY18.

Production increased from plants which changed hands under NCLT law. As per SteelMint's statistics, RINL saw a drop in output in 2019 to 4.84 MnT against 5.26 MnT in the previous calendar while JSW Steel too saw a drop in production to 16.04 MnT in CY19 over 17.28 MnT in CY18.

~Written by Madhumita Mookerji