India’s steel mills saw a slowdown in orders from its biggest export market, Vietnam, down more than 20% year-on-year in FY22. The loss was offset by tapping into new markets like Turkey, the United Arab Emirates, Belgium and Italy, according to data from the Union’s steel ministry.

India’s finished steel exports amounted to 13.5 MT in FY22, up 25% from the previous year. Exports during FY21 were 10.8 MT.

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

India’s finished steel exports include hot rolled coil (HRC) or strip – the most dominant supply, bars and strips, plates, tin-free steel, tip plates, cold rolled coils (CRC), galvanized pipes, among others.

Imports also declined to 4.7 MT in FY22, down almost year-on-year, from 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 said Activity area that Vietnam has reduced its imports of HRC. According to them, April data from the Joint Plant Committee (of the Union Steel Ministry) showed that 1.66 MT of HRC was exported to the Southeast Asian country, down from more than 20%, against 2.11 MT.

Vietnam converts HRC into galvanized steel or CRC and then exports them to other markets like China and the United States. A Covid-induced lockdown causing an economic slowdown in China is seen as a reason for the slowdown in orders. Port congestion is another factor, they say.

“As China opens up, orders from Vietnam will also increase in the coming days,” said VR Sharma, general manager of Jindal Steel and Power.

Alternative markets

Alternative markets to which Indian mills have increased their exports include the United Arab Emirates at around 1.3 MT, up more than 50% year-on-year. HRC exports made up the bulk, up 30%, sources said.

Italy and Belgium recorded a 24% and over 100% year-on-year increase to around 1.3 MT and over 1.2 MT, respectively.

Exports to Turkey jumped 35 times to nearly 1 MT from 0.028 MT in FY22. The spike was due to a sharp increase in demand for HRC, and nearly 0.9 MT of steel (HRC) was exported (0.002 MT in FY21).

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

Published on

May 15, 2022