China emerged as the leading export destination for India's finished steel products over April-June, as Chinese demand surged and Indian mills rushed to offload their stocks amid poor local demand due to the pandemic.
India exported about 965,000 mt of steel products to China in the first quarter of fiscal year 2020-21 (April-March), versus just 1 mt in fiscal Q1 2019, data from the Joint Plant Committee released July 23 showed.
The surge in exports to China was driven by the country's stimulus-fueled economic recovery, which supported domestic steel prices. China's monetary loosening and credit easing in the first half of 2020 boosted the infrastructure and property construction sectors, raising their steel requirements.
Vietnam came in second place importing 941,000 mt of steel products in fiscal Q1, 4.6 times more than the 204,000 mt imported in fiscal Q1 2019, when it was India's top destination for steel exports.
India was a net exporter of finished steel products in the first quarter of fiscal 2020-21 selling 3.27 million mt, up 145.3% year on year from 1.33 million mt exported in the corresponding quarter of 2019, the data showed.
Bulk of the fiscal Q1 exports comprised hot-rolled coil which totaled 2.41 million mt, up nearly four times from 623,000 mt recorded the year before.
In addition to HRC, semi-finished steel exports, which include billets and slabs, surged to 2.28 million mt, about 4.6 times more than 495,000 mt delivered in fiscal Q1 2019.
Imports, on the other hand, dropped 32.7% year on year to 1.21 million mt in the quarter, with Indian mills actively seeking government intervention in creating a "level playing field" for their products, market sources said.
Looking ahead, however, there are concerns if the exports surge to China will continue in the second-half of fiscal 2020-21, as China's steel purchasing managers' index dipped in June amid high raw material costs, rising inventories and falling new orders.
China's steel PMI fell 1.6 basis points from May to 49.3 in June, according to index compiler CFLP Steel Logistics Professional Committee.
-- Ashima Tyagi, Clement Choo
Source : Steel Business Briefing
