India’s steel mills are forecast to boost exports by more than a third this year as global prices soar and major producers of the alloy curb production.
The world’s second-largest producer may increase exports to as much as 15 million tons in the year started April from 10.8 million last year, according to Jindal Steel & Power Ltd.’s Managing Director V.R. Sharma. Higher global steel prices and the opportunities provided by China and Russia’s plans to cut down on overseas shipments will boost exports.
Currently, Indian mills are exporting as much as 40% of their output compared with 20% a year earlier, Sharma said. International prices are higher than local prices and are “very lucrative,” while local demand in the construction sector is still slow and could pick up from October, he said.
“Changes in the Chinese domestic steel policy will help enhance export opportunities for the Indian steel sector in the coming months,” N.L. Vhatte, chief executive officer of billionaire Anil Agarwal’s ESL Steel Ltd., said in a separate interview. “Now is the opportune moment for Indian steel exporters to widen their reach and seek out new markets by focusing on quality upgradation.”
Top producer China has been curtailing steel production in order to meets its targets to reduce energy intensity and pollution, and it wants to cap this year’s output below that in 2020.
Indian mills shipped out about 3.5 million tons in the three months through June as demand took a hit from the resurgence in coronavirus infections that led to lockdowns and curbed economic activity, Vhatte said, citing government data. The main export markets for Indian mills include the U.A.E, Vietnam and Italy.
However, fewer vessels at Indian ports may slow down shipments for at least the next couple of months, according to Jindal Steel’s Sharma. Steel products are piling up at Indian ports as ships have been arriving late because of strict quarantine norms globally, he said.
“The moment China and the rest of the world release the vessels, the situation will come back to normal,” Sharma said.
