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India's primary steelmakers have increased their share of exports in Q4 amid rising international steel prices, combined with a slight de-growth in domestic demand during the January-February period.
JSPL's share of exports in sales was around 21% in Q3 as against 38% in Q4. SAIL has increased exports to 0.40 million tonnes from 0.27 million tonnes in Q3. JSW Steel reported a crude steel production of 4.19 million tonnes in Q4 and sources said that there was a significant rise in exports. Tata Steel’s exports remained flat at 11% of total deliveries in Q3 and Q4.
“We continue to focus on the domestic market. However, in the last quarter of FY 21 and in the last two months exports have gone up on a QoQ basis because there has been a market pull,” said SAIL’s chairperson Soma Mondal, in an interaction with ET.
Mondal added that the company is agile enough to switch between domestic and export market, and does not want to keep inventories. “We would continue to keep a check on how much we export, quantum of it depends on the market forces,” she added.
“There was an increase in exports during the quarter, but we need to see that basic growth plan will always be based on the domestic market. During the first 15 days of January and February domestic demand was impacted after China’s Lunar new year,” said Jayant Acharya, JSW Steel’s director, commercial and marketing told ET.
Exports are increasing from India, only because of the good price in international markets. However, primary steelmakers are maintaining a good balance and maximum is consumed domestically, said JSPL’s managing director, V.R.Sharma.
AMNS’s chief marketing officer, Ranjan Dhar said "There is an increase in exports in the last quarter only to balance out the gap that was created in the trade market. Traders started destocking in February and reduced their normal lifting from mills, mills, therefore, had to cover their products with higher allocations towards exports"
Analysts estimate the share of exports to rise in the first half of FY 21, and will increase by 12-16% in FY 22, due to widening spreads between export and domestic realisations.
As per data from the ministry, finished steel exports in 2020-21 was around 10.79 million tonnes, showing a growth of 29% year-on-year and export of semis in the 11 month period till February 2021 grew by 131% to 6.09 million tonnes.
While exports of finished steel in the first quarter of fiscal 2021 were driven by lacklustre domestic demand due to pandemic-led lockdowns the surge in the last quarter was led by higher export realisation.
“Overall in fiscal 2021, exports increased 29%. The momentum is expected to continue and push finished steel exports another 12-16% higher this fiscal,” said a report by rating agency Crisil.
“Domestic steel prices rose slower than global prices, which widened the spread between landed global prices and domestic prices to 19% in March from 2% in October. This drove exports up,” said Crisil’s report.
The difference in the realisations led to increase in exports by 126% on-year in March to 1,290-kilo tonne (KT), compared with a monthly average of 650-750 KT in recent times, the report said.
Tata Steel has ramped up its capacities to supply around 500-600 tonnes of medical oxygen per day now against 300 tonnes earlier. JSW Steel has ramped up its capacities to supply around 900 tonnes of medical oxygen per day now against 600 tonnes a week ago.
“A week earlier, on an average 1500/1700 Metric tonnes /Day was being dispatched. The production on 25th April was 3468.6 MT,” said a press release by the government’s press information bureau on Monday.
Steel plants have been able to enhance the supply of LMO by taking various initiatives, which include reduction in the production of Nitrogen and Argon and only producing LMO in most plants, the statement added.
The steel plants are normally required to keep 3.5 days of safety stock of LMO in their storage tanks which is vaporized and used in case some problem develops in the oxygen plants.
“Through continuous engagement with the steel producers, the safety stock has been reduced to 0.5 days instead of the earlier 3.5 days because of which LMO supply had significantly increased,” the statement said.
While there is no supply shortage of the life-saving gas, several oxygen makers have said that there is a logistics issue, including shortage of containers to carry oxgen. To facilitate the faster movement of LMO, It has been directed by DPIIT that certain number of nitrogen and argon tankers be converted to carry oxygen.
As on date, there are 765 nitrogen tankers with a capacity of 8345 MT and 434 argon tankers with a capacity of 7642 MT. Permission for converting portion of them for carrying oxygen has been issued by Petroleum and Explosives Safety Organization(PESO).
“This will remove a major bottleneck in transportation of LMO to states. As on date, 1172 tankers are available for LMO, with the capacity 15900 MT,” the statement said.
Bhilai Steel Plant is taking a very short shut down to enhance their liquid oxygen production by 15MT. This shut down will not come in the way of dispatches. Similar directions have been given to other Central Public Sector Enterprises-owned steel plants to explore the possibility of enhancing their capacity.
ArcelorMittal Nippon Steel India is setting up a temporary medical centre with around 250 beds at its facility in Gujarat which will receive oxygen from the company’s plants. OP Jindal Modern School operated by Jindal Stainless in Hisar will be converted into an emergency COVID hospital. The proposed 500-bed hospital will be equipped with 50 ICU beds.
“In view of the pandemic, the oxygen plant at Hisar facility of Jindal Stainless is running up to a capacity of 150 percent. The plant has increased its oxygen production capacity to 7.5 -8 MT per day from 6 MT per day,” Jindal Stainless said in a statement.
Other steel manufacturers are ramping up production of oxygen at their captive plants to help overcome a severe shortage of medical oxygen in hospitals across the country, particularly in Maharashtra and Delhi.
Tata Steel has ramped up its capacities to supply around 500-600 tonnes of medical oxygen per day now against 300 tonnes earlier. JSW Steel has ramped up its capacities to supply around 900 tonnes of medical oxygen per day, up from 600 tonnes a week ago.
Source: economictimes.indiatimes.com
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