India Steel Export Volumes Set to Witness Drastic Surge

SEATTLE (Scrap Monster): Amit Dixit of Edelweiss Securities, while commenting on his outlook on steel sector, said that India is likely to become more of a steel exporter. The steel export volumes from the country are likely to witness significant surge.

According to him, the ongoing weakness in domestic demand has resulted in increased steel exports from India over the past several months. Prior to FY20, the country used to export around 5 million tons of steel per year. However, the exports have totalled around 2 million tons in the opening four months of the current fiscal year.

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Several steel majors have announced significant capex plans, mainly in brown field projects. This should result in boosted capacities at steel plants in a short period of time, unlike greenfield projects. The acquisition of state-owned steelmaking facilities by large private players will ramp up steel production in the country, which in turn will help to sustain high export levels, even amidst pickup in local demand, Dixit noted.

Commenting on Chinese steel market, he noted that the production cuts implemented by the country, in line with its decarbonisation goals, will likely intensify further during the winter season. The reduced production will have some impacts on global steel prices. It must be noted that Chinese steel consumption has dropped significantly over the past couple of months, falling by up to 10%.