The steel exports registered a growth of 150% in the month of February 2017 while imports declined 46% on a year on year basis signalling a sharp recovering trend for exports segment of the Indian Steel industry. This huge improvement comes amid earnest efforts by the government to protect domestic steel manufacturers from dumping by neighboring country China. Imposition of anti-dumping duty on steel has been a decisive move in this direction.
Export of steel in the month of February 2017 at 0.75 mt was up by 150% over February 2016, but declined by 15% over January 2017. Import of steel in February 2017 at 0.49 mt was down by 46% over February 2016 and by 19% over January 2017.In January export of steel saw a three-fold increase to 0.889 million tonne from 0.274 million tonne in January 2016.Imports in January 2017 were reported at 0.602 million tonne which were down by 41.7% as compared to January 2016 and by 21% as compared to December 2016.
Import of total finished steel was at 6.59 mt in the first 11 months of 2016-17 which declined by 38.5 % over the year-ago period. Export of total finished steel was up by 77.6 % in April-February 2016-17 to 6.62 mt over the same period of last year.
The consumption of steel in February increased marginally by 3% over the same month in 2016 according to the latest data from the Government. The overall crude steel production in February 2017 saw an increase of 8.5% at 8.08 mt. During April-February 2016-17, crude steel production was 89.08 mt, a growth of 9.3 % over the same period last year. The consumption of total finished steel saw a growth of 3.4 % in April-February at 76.22 mt.
China’s steel exports fell 23.2% year on year to 7.42 million tons in January as the number of trade barriers rose. The plunge in January extended the 26.8% decline seen in December 2016, according to the General Administration of Customs (GAC). Rising trade protectionism amid a global glut has weighed on China’s steel exports, which dropped 3.5% to 108.4 million tons last year. China, the world’s largest steel producer and consumer, has repeatedly stated that the root cause of the global steel sector’s woes is a sluggish world economy and shrinking demand for the metal.
A number of private and state-owned mills have almost doubled their steelmaking capacities over the past five years in India. The front runner was India’s largest steelmaker, state-owned Steel Authority of India Ltd, which increased crude steel production capacity to 20 million mt/year from the previous 13 million mt/year.
The demand for steel is struggling to keep pace with the rise in capacity. Recent data from India’s Joint Plant Committee shows that during April 2016-January 2017, SAIL’s overall finished steel output rose by an impressive 15.6% year-on-year, but only reached 9.95 million mt, way behind installed capacity of 12 million mt/year. The Ministry of Steel is also intent on fostering domestic steel production, as demonstrated by its ambitious goal of taking annual indigenous steel capacity to 300 mt by fiscal 2030-31, from 122 mt in 2015-16.
The demand for steel is expected to trend higher on rising consumption due to infrastructure development in India. The only concern now remains is when would it meaningfully translate into robust growth in the earnings for the steel companies in India.