According to the analysts, the steel exports of India are expected to diminish in the coming fiscal year beginning April 1st. Due to the increase in demand from automotive & infrastructure enterprises.
As per the estimated figures released by the Joint Plant Committee, exports of finished steel has marginally gone high from 6.36 million tonnes to 6.5 million tonnes during the ongoing fiscal year - april-december period. However, as per the report, the steel exports decreased to 767,000 tonnes in December.
“The auto sector has seen one of the worst periods in the last 9 months and we see that the worst is behind…we expect better demand from auto and infra companies in FY2021E on a low FY2020 base and we are seeing that restocking has resumed since December 2019,” Kotak
Institutional Equity analyst Sumangal Nevatia said.
“There will be a decrease in the Iron ore exports in FY2021 due to the respite interruption and license expiry and auctions of iron ore mines in Odisha. A tight domestic market should elevate domestic iron ore prices and inflate costs for steel companies,” he added.
“Green shoots for steel demand are coming from various sectors, especially from construction and auto companies. Along with this, the government’s spending on infrastructure will further boost demand, which will continue for next 3-4 months,” said Jayant Acharya, director (commercial and marketing), JSW Steel.
Therefore, the enterprise reduced steel exports to 24 per cent from 31 per cent in the second quarter of the current fiscal year viz 1st april 2019 – 31st march 2020.
“Steel supply could be lower in India and in the global market in 2020 due to rising Chinese demand and increasing prices of coking coal and iron ore, the basic raw material for steel,” said Manoj Jain, Director, commodities and forex banking, IndiaNivesh. “Iron Ore prices have increased by 14 per cent in the last one month to USD 106 a tonne and coking coal prices have gone up about 10 per cent to USD 145, data sourced from the Indian Commodity Exchange showed. While exports may come down, India will still be a net exporter,” he adds.
“Dumping of Chinese steel into other countries could be lower and India can tap the opportunity. Rising steel and iron ore prices could support Indian steel export and probably India could still be a net explorer of steel in the year 2020,” concludes Manoj.
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