Steel exports from top 10 countries up 10% y-o-y in Jan-Sept

Energy crisis, output cuts may slow down momentum in Oct-Dec

Total steel exports (including semis) from the world's top 10 exporters have grown around 10% y-o-y to almost 185 million tonnes (mn t) in Jan-Sept'21 against 167.5 mn t seen in the same period of the previous year, as per provisional data available with SteelMint.

Global steel exports in Jan-Sept'21 amounted to around 320 mn t, up around 7% y-o-y against 300 mn t in the corresponding period last year (CPLY). The share of "others" is at 135 mn t in the first nine months this year against 132.5 in CPLY.

In the entire CY'20, total steel exports were at around 400 mn t in which the share of the top 10 was 210 mn t. It is evident they contributed over 50% of the exports and this trend has continued so far into the current calendar.

The top 10 countries include China, Japan, Russia, South Korea and India as the top five.

Highlights

• China leads the top 10 charts with a growth of 34% from 40.3 mn t in Jan-Sept'20 to 54.1 mn t in Jan-Sept'21.
  
  
• Russia's volumes grew almost 21% from 20.5 mn t in Jan-Sept'20 to around 25 mn t in the same nine months in CY'21.
  
  
• Japan's volumes were up 5% to 23 mn t in Jan-Sept'21 against 22 mn t in CPLY.
  
  
• South Korea's exports actually degrew 6.2% to 18.3 mn t in Jan-Sept'21 against 19.5 mn t in CPLY.
  
  
• India's steel exports rose a healthy 20.4% to more than 17 mn t in Jan-Sept'21 against 14 mn t in CPLY.
  
  
• Exports from Germany dropped a steep 39% in these first nine months.
  
  

The data reveals that overall, most countries, except Europe and a few others showed a growth in this period. Europe's exports were down perhaps because of domestic supply issues and also because it needed the steel domestically for post-pandemic reconstruction. Spain, Germany, Czech Republic and Turkey have shown higher imports this year compared to last year, data reveals. Consequently, SteelMint estimates that a sizeable part of this 10% increase in exports till Sept'21 could have been diverted to Europe.

Outlook

However, the global energy crisis may not allow the exports momentum to sustain for the rest of the year. China's production cuts, coal shortage and steep coal prices would ensure that steel exports would lose some pace in the balance three months of CY'21. Exports in September are already down 3% m-o-m.

Russia's export tax would perhaps also disincentivise exports till Dec'21-end.

The scenario could be similar in other geographies too against the backdrop of a looming global energy crisis, with Europe also facing a natural gas shortage.

If the average export volumes for the top 10 countries was around 15 mn t per month, this figure may lose momentum over Oct-Dec'21.

As a result, SteelMint estimates that steel exports for entire CY'21 would touch around 425 mn t, registering a growth of around 6% at a conservative estimate.

Where India is concerned, several smaller mills, which cater to 60-65% of the longs market, plagued by the power crisis, may have to shut down temporarily. Primary mills may step in to fulfill this supply gap in the local market. This, in turn, may lower billets exports. Flats too would be impacted by the double whammy of the power crisis and drop in downstream demand, but which may compel mills to have higher flats allocations for exports till year-end.