Steel exports in FY22 likely to surpass that of FY21: Infomerics report

Indian steel industry has bounced back despite being hit by the slowdown in the construction sector due to COVID-19. According to the latest report from the New Delhi-based credit ratings agency Infomerics, exports for the ongoing fiscal (FY22) are expected to surpass that of FY21. In case of steel, exports have been on a rise since 2015-16 except for the slight dip in 2019-20 whereas imports have been on a downward spiral since 2020.
 
Exports for the ongoing fiscal (FY22) are expected to surpass that of FY21 and have already surpassed 70 per cent of FY21. “The declining imports and rising exports are an indicator of the country moving ahead in its pursuit of self-sufficiency or “atmanirbhar,” the report argued.

Despite border tensions with China, India's steel exports accounted for Rs 19,267 crore while imports from China stood at Rs 16,369 crore, as per Infomerics ratings agency. USA and China are top destinations for exporting steel while China and Germany stood as the top sources of imports for India.

Infomerics also said that any challenges for the construction sector will impact the steel sector as has been witnessed during the COVID-19 pandemic. Besides this, global inflationary trends including US inflation, surging fuel prices, high energy costs in Europe and disrupted supply chain were big challenges for the sector.

The report also states that estimated steel production in India is estimated to touch 140.4 MT by FY25. Meanwhile, the country's steel production went up by 25.6 percent and overall steel production stood at 77.4 MT during January 2021-August 2021. Indian steel manufacturers like SAIL, TSL Group and JSWL have reported a combined crude steel production of 16.71 MT in FY21 and are projecting a production of 21.4 MT with an estimated sectoral growth of 21.65 percent.

Infomerics is also hopeful of government initiatives like the National Steel Policy, 2017, National Mineral Policy-2019 and PLI scheme for the sector. “However, to achieve the ambitious national objective of 300 million tonnes of production capacity by 2030-31 in terms of the National Steel Policy, 2017 and the National Mineral Policy-2019, synchronised and concerted action with a sense of immediacy by all stakeholders to support the different stakeholders, increase financing by the private sector, and enhance consumption and trade of steel is required,” Infomerics said in a release.

It also mentioned that leading steel companies in India had to hike prices of hot-rolled coil (HRC) to offset the impact of rising coking coal prices, adding that steel demand is forecast to increase 2.2 percent to 1,896.4 MT in 2022. Besides government policies, it said that greenfield and brownfield steel mills, up-scaling to acquire muscle and scale in global terms, technological modernisation constitute important elements of sectoral growth strategy.

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