The likes of Tata Steel and Jindal Steel & Power are exporting 80-90% of their production, while JSW Steel is looking at shipping out somewhere around 20-30% of its output. In addition to traditional markets like Southeast Asia and the Middle East, China has emerged as a significant importer of semi-finished steel items as mills in that country ramp up production. Exports are now likely to come down as Indian gradually eases the lockdown restrictions.
Tata Steel said it was focusing on exports which accounted for a significant share of its production in this period.
In April, for instance, Tata Steel sold 80-90% of its production in export markets, global chief executive TV Narendran told ET. “The proportion of exports will come down over next few months as domestic demand revives,” he added.
India exported 11 million tonnes of steel in 2019. Steel items like rebars, hot-rolled coils, slabs and billets are exported from India.
“There is an opportunity. China is importing steel. Japan, Korea had shut blast furnaces. As a result, their captive markets such as Vietnam, Indonesia and Cambodia are countries that are importing steel,” a senior executive at JSW Steel said.
Even during the normal times, India which has been a net exporter, used to export 10% of its steel production and import 8% of its local capacity.
JSPL has also seen a spike in exports after it decided to book orders from abroad in February.It reported its highest ever exports of steel & related products during April 2020 at 248,000 tonne, a growth of 109% (m-o-m). Exportscontributed to 74% of its total sales volume.
“Our plants are working at 75-80% capacity utilisation. We are exporting 80% of total production these days. You may consider it ironical, but now we are exporting steel to China, Malaysia, Europe, the USA,” chairman Naveen Jindal told ET recently. The company is also catering to export order of rail blooms from France, he added.
Export orders include those for steel billets, a semi-finished item that has seen a spurt in orders from China. “After resuming production full throttle following the Covid-19-led shutdown in February-March, the Chinese mills are relying on imports of semi-finished steel items in a big way to quickly notch up production,” an industry expert said.
For Man Industries (India), one of the largest manufacturers and exporters of large diameter carbon steel line pipes in India, export orders as a percentage of total sales range between 50% and 60%. “In the current order book of approximately Rs 2,000 crore, exports account for more than Rs 1,300 crore,” group chairman RC Mansukhani said. “The majority of our clients are in the MENA (Middle East and North Africa) region and Southeast Asia,” he said.
The company’s plants in Anjar (Gujarat) and Pithampur (Madhya Pradesh) have resumed production.
While Man Industries caters to large companies like ONGC, IOC, HPCL, BPCL and Gail in the domestic market, its major international clients include Shell, Kinder Morgan, Kuwait Oil Company, Hyundai Engineering and Construction Ltd.
“Any excess steel produced after meeting the domestic demand will be used for feeding up the large export markets, which are in the process of rationalising their own capacities for meeting own internal demand,” EY India national leader-metals & mining Saurabh Bhatnagar said.
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