ICRA: Conflict in Eastern Europe to Boost Indian Steel Exports

SEATTLE (Scrap Monster): The Russia-Ukraine crisis situation will lead to export opportunities for domestic Indian steelmakers, observed ratings agency ICRA. However, the sanctions on Russia may result in elevated input costs for companies until readjustment of raw material trade flows.

In a research note, ICRA noted that Russia is the fifth largest producer in the world. The country had accounted for 10% and 17% of global trade in metallurgical and thermal coal respectively during 2020. Since the beginning of 2022, international coal prices have surged significantly. The elevated coal costs have eaten into margins of steelmakers, as is evident from the Q3 FY22 results declared so far.

RELATED NEWS:

Russian Steelmaker Defers EU Steel Exports

Heightened Focus on Infrastructure to Spur Indian Steel Demand

Among other raw materials, Russia happens to be the world’s third largest producer of nickel, along with Ukraine. Also, it is the leading global exporter of iron ore pellets. The disruption in supply of these key steelmaking raw materials may badly impact Indian steel companies, ICRA noted. The ongoing conflict in Eastern Europe could aggravate input cost pressures on domestic steel mills, it added.

Russia and Ukraine are the world’s 5^th and 12^th largest steelmakers in the world respectively. The crisis situation could lead to regional steel supply shortages, which in turn may result in market share gains for Indian companies.