Covid pushes steel exports to record high

Steel exports touched a record high in FY21, saving the day for companies, as domestic consumption dragged due to Covid-related disruptions in the first half of the year.

Data compiled by the Joint Plant Committee (JPC) shows that finished steel exports between April 2020 and March 2021 (provisional) stood at 10.785 million tonnes, an increase of 29.1 per cent. Exports of semi-finished steel during the period were at 6.6 million tonnes, an increase of 133 per cent. JPC officials said exports were at an all-time high. The previous high was in 2017-18 at 11.614 million tonnes. Steelmint data pegged finished steel exports in FY21 at 11.65 million tonnes and semi-finished at 7.25 million tonnes, an increase of 31 per cent and 153 per cent, respectively, over the previous year.

Jayant Acharya, director — commercial & marketing — JSW Steel, said, exports of 17-plus million tonnes in FY21 is the highest. “Of this, about 11 million tonnes was in the first half. China was importing large quantities during this period,” he added. Sushim Banerjee, former director general, Institute for Steel Development & Growth (INSDAG), too, said this was a record for exports.

In the first half of the year, when India imposed a lockdown to contain Covid, companies resorted to exports.

Jindal Steel & Power (JSPL) MD V R Sharma said the company had recorded its highest exports. Exports accounted for 35 per cent of sales in FY21 for the company compared to 13 per cent in the previous year. However, it now stands at 25 per cent of sales, pointed out Sharma. Acharya, added, “In H1, domestic consumption was down 28 per cent due to strict Covid-related restrictions and lockdown. Exports were the main outlet in H1. With gradual opening up, domestic business started picking up from July-august 2020 and consumption improved in Q3 and Q4 of FY 21. In H2, consumption was up by 15-16 per cent,” he added.

Overall, the year ended with a drop in consumption of 6.7 per cent and production to the tune of 7.8 per cent.

However, it was still better than the projections made in April last year for FY21 as demand picked up over Q3 and Q4. “The intensity with which the recovery happened surprised everyone. Demand was led by automotive, appliances, and followed by renewable energy. Infrastructure and construction, roads and highways and yellow goods followed,” said Acharya. However, even as domestic demand has picked up, exports are expected to be robust owing to higher realisations. “Export realisations are now higher than the domestic market as prices in China, Europe and the US have surged,” said Acharya.

A CRISIL report said while exports of finished steel in the first quarter of FY21 were driven by lacklustre domestic demand, surge in the last quarter was led by higher export realisation.

CRISIL expects the momentum to continue that will push finished steel exports by another 12-16 per cent this fiscal year.