India’s finished steel exports fall 53 per cent in June

New Delhi, July 11 Impact of export duty by the Centre, a slowdown in demand and competitive pricing by Chinese offerings saw India’s finished steel exports for June drop 53 per cent year-on-year to 0.64 million tonnes from 1.4 million tonnes in the year-ago-period.

The provisional data collated by the Steel Ministry and industry, and accessed by BusinessLine, shows this to be the fourth straight month of decline in steel exports from India – beginning March 2022.

On a month-on-month basis, exports fell 19–20 per cent. Steel exports were around 0.80 mt in May.

For the first quarter of FY23 – April to June – finished steel exports are expected to see a near 40 per cent fall, year-on-year, from 3.6 mt to around 2.2 mt.

Finished steel exports include non-alloy steel and alloy and stainless steel. It does not include semi-finished offerings like billets and so on.

“Poor demand in some key markets, because of recessionary pressures, and lower priced offerings by Chinese players in export markets have hit Indian mills hard. Currently, export price following imposition of duty, is higher by at least 10 per cent for Indian mills versus China. Offerings for alloyed steel (which are exempt from duty) did not have many takers either,” a trade source said.

Country-wise export details are yet to be compiled.

Pitch for export duty withdrawal

Incidentally, major steel mills in India are already pitching for withdrawal of the export duty levied earlier in May. The top brass, including owners of steel mills, are planning to meet ministry officials, including the new appointed Union Minister, Jyotiraditya Scindia, later this week.

Sources say while there is some buzz around the review of export duty on steel, there “could be phase-wise withdrawal”.

The pitch is currently for withdrawal of duty from flat steel offerings – like hot rolled coils, hot rolled strips, etc – which are the key demand drivers in the sector. Flat steel offerings account for nearly 80 per cent of Indian steel mills exports.

However, export duty on long products - rebars or reinforced steel bars, wire rods etc, which account for less than 20 per cent of exports – are likely to continue. Long products, used in construction including homes, have a direct impact on end-users that include home-buyers and common man.

Production details

According to data, provisional production by PSU major SAIL saw a near 12 per cent jump, y-o-y, in finished steel production for Q1FY23 while RINL’s production during the period fell 1 per cent. The two PSUs account for close to 19 per cent of the country’s steel production.

Among the private players, Tata saw a 5 per cent jump in production y-o-y; while others which include AM / NS (ArcelorMittal Nippon Steel), JSW and JSPL, put-together, saw over 13 per cent increase during the period under review.

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