Steel exports increase in March quarter but lag behind year-on-year levels

India’s steel exports rose sequentially in the March quarter at more profitable prices, but volumes remained below levels a year ago. Exports of finished steel products rose to 1.98 million tons in the March quarter, up nearly 73% from 1.14 million tons in the December quarter, data from the Joint Plant Committee (JPC) showed. However, exports were two-thirds of the previous year’s level. For full FY23, India’s finished steel exports halved to 6.72 million tonnes yoy due to the impact of an export tariff on steel. The levy was imposed in May and then lifted in November.

The Indian government had imposed the export duty on most categories of steel in an attempt to lower the alloy’s prices in the domestic market and curb inflation. However, this made Indian steelmakers uncompetitive for export markets. Exports have increased month-on-month since November after the tariff was lifted. March exports were actually the highest of any month in FY23 at 812,100 tons, according to JPC data.

“The elimination of export tariffs has helped the industry compete in international markets – yes, but the world economy is not doing well. Therefore, even after the tariff is lifted, India’s exports are not increasing as they should have,” said Seshagiri Rao, Group Chief Financial Officer, JSW Steel. Even after the tariffs were lifted, export numbers for the March quarter lagged year-on-year as last year’s March quarter saw strong international prices that boosted exports, said Pallav Agarwal, vice president of Antique Stock Mediation.

Export prices in the March quarter of this year are about 25-30% lower year-on-year but about 20% higher quarter-on-quarter, he said.

While Indian steelmakers generally preferred to sell in the domestic market due to higher prices here, export realizations showed a different trend this time. After the prices on the domestic markets were exceeded for a short time, the export earnings are on the same level as domestically.

International steel prices rose by about $50-$100 a tonne in the March quarter, while domestic prices rose by about £2,500-£3,000 a tonne, said another analyst, who asked not to be named. “International prices have increased, but domestic prices have not kept pace with international markets,” said Rao of JSW Steel.

JSW Steel and Jindal Steel & Power are among the country’s largest steel exporters, while Europe, the Middle East and Southeast Asia are the largest export markets for Indian steelmakers. In India, steel consumption rose nearly 13% to 119.17 million tonnes, outpacing production growth of nearly 7% to 121.29 million tonnes in FY23.

India, the world’s second-largest steelmaker, was among a few countries to show strength in steel.

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