The COVID-19 outbreak in China gave Indian billet exports a boost in February. India’s billet exports surged by 121pc in February to 219,000mt, from the year prior, according to the government data. Exports, however, were flat compared to January. India stepped in to fill the void left by a halt in Chinese activity in the period when China grappled to control the rising number of cases.
In the Apr- Feb 2020 period, billet exports from India increased by 34pc to 2,635,000mt, from the year prior. Of this, Nepal imported the highest volume of billets from India at 975,000mt, followed by Italy at 285,000mt, Sri Lanka at 243,000mt, Thailand at 213,000mt, Indonesia at 202,000mt and followed by other countries. Sponge iron exports in Feb 2020 rose by 32pc to 83,000mt from the prior year and up by 12pc from Jan20.
With the Indian currency depreciating, primary and secondary mills preferred lucrative seaborne markets. Indian rupee stood at Rs72 against US$1 in the last week of February from Rs71.3 in late January. Additionally, India’s domestic demand in the period was subdued in the absence of major ongoing infrastructure and housing projects amid an economic slowdown.
The outlook for steelmakers in the near term, however, does not look very promising on the back of COVID-19 spread in India. With elevated inventories in China, global steel prices are likely to be pressured. China’s inventories have reached a record high, crossing the 100mn mt mark in the first quarter. To boost exports, the Chinese government has increased export rebates on various steel products from 10pc to 13pc. Indian mills thus face a threat of dumping by China.