Indian steel exports witnessed its first uptick this fiscal with there being an 11 per cent sequential rise in October (compared to the previous month) to 0.44 million tonnes (mt). Outbound shipments in September was 0.4 mt; and comparative period last year was 0. Imports for the month also moderated, for the first time this year, as India tightened import norms (including for non-BIS offerings) to 0.98 mt, down 4 per cent sequentially, as per a report of the Steel Ministry accessed by businessline. September imports was so far the highest this fiscal at close to 1.1 mt.
On a y-o-y comparison, imports continued to be at elevated levels, up 34 per cent indicating continued stress; while exports too witnessed an uptick – up 51 per cent. In October last year imports were 0.273 mt, and exports were at 0.29 mt. However, margins for exporters have continued to remain compressed.
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For the first seven months of the fiscal (Apr – Oct), the country was a net importer of steel with imports at 5.72 mt (up 40 per cent y-o-y) surpassing exports of 2.75 mt, by 2.97mt, as per the provisional number available with the Ministry.
“Imports came down on account on India imposing quality controls and some stringency on non-BIS offerings. Moreover, with the Chinese stimulus announced, there has been some arrest in steel trade price slides in India which helped with recoveries in October. But, yes, margins for domestic steel makers continue to be under pressure,” a Ministry official said.
In fact, in October, Chinese steel prices where apparently being quoted at a premium of around ₹3000 per tonne (for specific products) – ex Mumbai; as compared to domestic offerings.
Improved Sentiments
PSU-major SAIL’s top brass, during a recent investor call confirmed improvement in domestic steel prices, specially for long products – up by 2 per cent-odd sequentially to ₹53,000 per tonne (in October) and at “similar levels in November”. While for flat products, realisations “were still in a challenge”, down 4 per cent sequentially to ₹47,000 per tonne (vs ₹49,000 a month back).
Blended realisations for the company was around ₹48,000 per tonne in October. And, in November it improved to ₹48500 – 49,000 per tonne. The average price for Q2 (September quarter) was ₹50,500 per tonne. A blended realisation means averaged out price across long and flat products both.
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Jayant Acharya, Joint MD and CEO, JSW Steel – the largest steel-maker in India in volume terms – said, post a slump in September when pricing had gone down steeply, there is some improvement in current scenario. Channel stocks are down and “restocking demand and demand from the institutional customers have improved”.
“Retail was impacted by import sentiment, exports were lower….We now expect retail restocking to start. Pricing we feel will remain positive because of a seasonally stronger Q3 and Q4. So that will aid margin expansion as we go into H2,” he said during an investor call.
JSW has initiated price hikes in October for both flat and long products. While as per market sources, Tata Steel too had initiated hikes last month, but these were lower than July peak.
India’s finished steel production for April to Oct period stood at 82.65 mt, up 4.4 per cent y-o-y with over 86 per cent of it (71mt) coming from the private sector.
Consumption continued to witness strong double digit growth of 13 per cent, the Ministry report said.
