India’s steel exports in Q1 FY24 at 2 million tonnes (mt), dropped to the lowest since Q1 FY21 following a combination of global factors that include weaker offers from key markets – Belgium, UAE, and Vietnam, among others; a slowdown in buying across newly tapped markets like Turkey; and increased price competition with Chinese players.

Finished steel exports dropped over six per cent y-o-y in Q1 FY24 over the 2.2 mt reported in the year-ago period, and over 35 per cent since Q1FY21 (the first year of opening up post Covid), when it stood at 3.3 mt.

In Q1FY22, Indian steel mills exported 3.6 mt of steel. In Q1 FY20, a Covid year when India had declared a lockdown, exports were 1.33 mt; while in Q1 FY19 exports were around 2 mt.

Volume-wise, hot rolled coil/strip at 0.8 mt was the item most exported, accounting for 37 per cent share in total finished steel, a Steel Ministry report accessed by businessline said. The report mentions that flat products accounted for a 90 per cent share (down by 0.3 per cent; and the remaining 10 per cent was the share of non-flats (down by 39.8 per cent).)

Market specific performance

Italy – which has emerged as the top buyer for Indian hot rolled coils in recent years - saw a 25 per cent increase in shipments, y-o-y, to 0.5 mt for April – June period; while Spain saw a 45 per cent jump y-o-y to 0.2 mt. Nepal saw a 31 per cent rise y-o-y to 0.17 mt.

However, other key markets that include Belgium, UAE, Turkey and Vietnam all saw a fall wiping out the benefits reaped from increasing exports to these countries.

Sales to Belgium dropped 36 per cent to 0.17 mt; UAE saw a drop of 17 per cent to 0.15 mt; while Vietnam and Turkey do not feature in the top five markets anymore. Smaller markets categorised as ‘Others’ saw a 20 per cent fall (one of the steepest in recent times) to 0.9 mt for the period under review.

Typically, Vietnam and Turkey have been buying Indian offerings, put across value adds and then exporting them further to European and other markets.

Price pressure

“The global steel prices continued the downward journey for the fourth month in a row in June, due to a combination of local and global factors,” the Ministry report said, adding that barring China, where steel prices showed a marginal uptick compared to the previous month, prices in other major markets like the US, Europe, Russia and India followed a downward trajectory.

Growth forecast, sluggish demand in the US, Europe and China, tighter monetary policy by global central banks, elevated inflation and the ongoing Russia-Ukraine conflict and its resultant impact on global supply-chain situations continue to be determining factors.

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