Steel sector ramps up exports as domestic demand slumps

Due to a slowdown in construction activity and production cuts in the automobile industry due to an acute chip shortage, leading steelmakers in India are seeing sluggish demand in the domestic market, prompting top steelmakers to boost exports to keep stocks low. JSW Steel produced 1.377 million tonnes in August, up 5% year on year but down slightly from July's output of 1.382 million tonnes. August production at Naveen Jindal's Jindal Steel and Power fell by about 2% sequentially to 660,000 tonnes. Exports now account for around 46% of the total sales of JSPL volume of 710,000 tonnes. VR Sharma, managing director of JSPL, cited that the company is committed to meeting its annual sales and production targets and anticipates a sharp rebound in domestic demand once the monsoon season is over. Steel demand is typically low in the July-September quarter, when construction activity slows due to monsoon rains, according to experts. From a peak of Rs 70,000 per tonne at the beginning of July, domestic benchmark HRC steel prices have marginally corrected to Rs 66,000-66,500 per tonne. This is due to a drop in the price of iron ore. Iron ore prices for September deliveries were cut by Rs 1,000-1,160 per tonne by the state-owned NMDC. Prices are also expected to fall in Odisha. In a recent report, SteelMint reported that the Odisha iron ore fines Fe 62% index closed at Rs 6,900 per tonne, ex-mines, including royalty, DMF, and NMET in August end, down Rs 1,800 per tonne month-on-month. In a recent report, global brokerage firm Credit Suisse expressed concern about the steel sector, citing the fact that steel prices have been falling in the country for the past three weeks. Image Source Also read: India to break steel demand record as economy recovers