The crisis between Russia and Ukraine, as well as China’s supply limits, have boosted worldwide demand for Indian steel exports, which are likely to reach an all-time high of more than 20 million tonnes (mt) in FY22.
Indian millers are expected to exceed FY19 export statistics of roughly 19 mt, according to trade sources.
Steel businesses are expanding into new markets such as Turkey and the United Arab Emirates, and certain Southeast Asian nations, including Indonesia and the Philippines, are approaching Indian mills as well. Russia sells around 9 million tonnes of steel to the EU, whereas Ukraine sends approximately 6 million tonnes.
Increasing demand for India’s steel
According to SteelMint data, flat steel products had the biggest volume share at almost 13 mt, up 23% year on year. Hot-rolled coils (HRCs) and plates, galvanized pipes and tubes, and cold rolled coils (CRCs) were among the most common downstream items exported. Overseas sales of finished longs increased by 86% to 2.43 mt, while semis (billets) decreased by 30% to 5.05 mt (7.25 mt).
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Demand is high, according to VR Sharma, Managing Director of Jindal Steel and Power Ltd (JSPL), and will continue long into FY23. According to the company’s order books, exports are expected to account for at least 33-35 percent of revenues in Q1 FY23.
Exports accounted for 33 percent of revenues in FY22 (up from 25–30 percent earlier).
Mills in Ukraine have been seriously destroyed and will need to be rebuilt; mill workers have been relocated, and the nation will require steel in order to rebuild. Then there are the restrictions on Russia, which can be maintained. When all of this is considered, demand from Indian mills is expected to continue,” he stated BusinessLine.
Europe is the primary buyer of India’s steel
The demand arose as a result of Europe’s post-Covid rebuilding. There was also a natural gas scarcity, and excessive prices forced the closure of some mills, albeit briefly. This raised demand for CRCs from Indian mills, which are utilized in consumer items and vehicles.
According to SteelMint statistics, shipments to Europe increased over 76% in FY22 to 5.71 mt, up from 3.35 mt in FY21. In comparison to India, European steel costs were $200 per tonne higher.
New marketplaces for India’s steel exports
Surprisingly, India’s mills benefited from China’s reduced export activity as a result of rebate withdrawals. Flat items gained access to new markets in West Asia, such as Turkey and the United Arab Emirates. These countries buy Indian steel and then resell it in Europe after adding value.
Turkey’s imports from India increased from 48,000 tonnes in FY21 to 1.27 million tonnes in FY22, according to SteelMint statistics, while the UAE’s increased from 0.99 million to 1.34 million tonnes over the same period. LATAM, another area where Chinese companies are concentrating their efforts, might also be exploited.
It noted in a study that “Indian mills exhausted their annual flat steel capacity for CY21 (1.13 mt flat quota) in the first five months of the previous calendar year, spurred by greater profits.
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