Indian steel mills witnessed dip in orders from Vietnam

Indian steel mills witnessed a slowdown in orders from its largest export market, Vietnam, down by over 20 per cent year-on-year in FY22. The loss was made up by tapping into new markets like Turkey, UAE, Belgium and Italy, the Union Steel Ministry data shows.

India’s finished steel exports stood at 13.5 MT in FY22, up 25 per cent over the previous year. Exports in FY21 was 10.8 MT.

With 1.7 MT exports in FY22, Vietnam continues to be the country’s largest market in volume terms. Finished steel exports in FY21 was 2.2 MT.

Finished steel exports from India include hot rolled coils (HRC) or strips — the most dominant offering, bars and strips, plates, tin free steel, tip plates, cold rolled coils (CRC), galvanised pipe, among others.

Imports, too, was down to 4.7 MT in FY22, a nearly y-o-y decline, over the 4.8 MT imported in FY21.

The country’s steel production in FY22 was 113.5 MT, while consumption stood at nearly 106 MT.

Slowdown in orders from Vietnam

Trade sources told BusinessLine that Vietnam reduced its import of HRCs. According to them, the April Joint Plant Committee data (of the Union Ministry of Steel) showed 1.66 MT of HRC was exported to the South East Asian nation, down over 20 per cent, as against 2.11 MT.

Vietnam converts HRC into galvanised steel or CRCs and then export them further to other markets like China and the US. A Covid-induced lockdown leading to economic slowdown in China is seen as a reason for slower orders. Port congestion is another factor, they say.

“As China opens up, orders from Vietnam would increase too in the coming days,” VR Sharma, Managing Director, Jindal Steel and Power, said.

Alternative markets

Alternative markets to which Indian steel mills increased exports include the UAE at 1.3-odd MT up by over 50 per cent, y-o-y. The HRC exports formed the bulk, up by 30 per cent, say sources.

Italy and Belgium saw a 24 per cent and an over 100 per cent increase, y-o-y, at around 1.3 MT and over 1.2 MT, respectively.

Exports to Turkey witnessed a 35-time jump to nearly 1 MT, as against 0.028 MT in FY22. The spike was due to a sharp increase in HRC demand, and nearly 0.9 MT of steel (HRC) was exported (0.002 MT in FY21).

“India’s steel exports could remain strong in the first month of FY23, as the European Commission adjusted its EU steel imports quota system, effective April 1, to avoid regional market shortages following a ban on steel from Russia and Belarus. However, long-term sustainability depends on factors like global slowdown, increasing Covid cases in China and so on,” a trade source said.

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