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Despite three consecutive years of growth, India’s total steel exports dropped significantly in FY23, reaching a low of 8.4 million tonnes (mt). Shipments nearly halved from the 18.4 mt registered a year ago.
Key markets such as Vietnam, which was once the largest buyer of Indian steel, as well as Italy and Belgium, have slowed down on their purchases. Additionally, newly-tapped markets like the UAE and Turkey have also experienced a slowdown in offers.
Orders to the top five markets (for Indian mills) dropped between 18 and 49 per cent, as per a Steel Ministry report, accessed by businessline.
India’s total steel exports include semi finished steel — billets, slabs, ingots — and finished ones like non-alloyed, alloy and stainless steel. In FY23, there were 1.6 mt of semi-finished steel, down 66 per cent YoY, being shipped out to customers overseas, while finished steel exports were 6.8 mt, down 50 per cent YoY.
In value terms, steel exports fetched $8,100 million, half of last year’s numbers. Exports had been rising since the last three years — from 11.1 mt in FY20 to 17.4 mt in FY21 (up 56 per cent) to 18.4 mt in FY22 (up 6 per cent).
“In 2022-23 recessionary trends deepened in Europe, a key market; while orders to Vietnam and the UAE were down on account of lower offers, among others factors. Then export duty hit demand,” said an exporter.
Exports market under stress
For Indian mills, Italy emerged as the key buyer for finished steel at 1 mt, while Belgium moved up the ranks to be among the top four at 0.6 mt. The change is reflective of the increased quota that Indian mills obtained in the EU, since sanctions were imposed on Russian supplies. Year-on-year, the two markets saw orders decline 18 and 45 per cent, respectively.
Vietnam slipped to the second spot this fiscal with 0.9 mt of shipments, and a 49 per drop in volumes.
China, once a large buyer, does not even feature on the top five, while the UAE slipped down to the third spot in FY23.
Nepal, with 0.5 mt, made it way back among the top five at the cost of Turkey where offers slowed down to 0.4 mt (against last year’s 1 mt).
Bearish outlook
SteelMint’s India HRC export index fell by $10/tonne w-o-w to $685 FOB east coast against $695 FOB seen a week ago. The drop came on account of limited trading activities in the Middle East and competitive Chinese prices being offered there making Indian offers unviable.
Prices in the Vietnamese market have plunged due to dull buying interest. In addition, poor demand in the European Union has weighed down the sentiment.
According to the ministry report, global steel prices continued to remain volatile. While increasing scrap costs and an expectation of improvement in demand pushed up steel prices in Europe, supply constraint was the key factor behind elevated prices of the commodity in the US.
The Russian (offerings) saw a relatively stable price on surge in demand for flat steel products from earthquake-hit Turkey, while demand in China is yet to pick up momentum.
“Going forward, the ongoing Russia-Ukraine conflict and its associated impact on global supply-chain, stubbornly high inflation across geographies, tighter monetary policies and financial uncertainty expected to keep steel prices on the edge,” it said.
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