Domestic demand will also help in keeping the price of the alloy stable in the country, they said.
China’s steel exports, including to India, have seen a sharp jump in recent months. Its shipments to India, for instance, hit a multi-year high in the June quarter.
Chinese mills are also reported to be undercutting other steel producers in terms of prices. This, in turn, has had an impact on exports by Indian steel companies, with countries in the Middle East and Vietnam buying more steel from China.
India exported 780,000 tonnes of finished steel and billets a month on average between January and July, as against an average of 1.08 million tonnes a year earlier, data from market intelligence platform SteelMint show.
Industry watchers, though, say that there will be little impact on the margins of Indian steelmakers despite the fall in exports.
“The margin impact of not having strong exports is not material, because domestic prices are strong, and demand is strong enough to sustain this,” said an analyst with a leading Mumbai-based brokerage, who did not wish to be named. “India is the only bright spot in the world in terms of demand — there is no demand in China, US or even the European region,” he said.
One senior executive at a leading steel company backed this view. They said despite the dip in exports, local production between January and July increased, supported by higher consumption of steel in India.
“The first six months’ data (January-June) reveal a rise in both the production and consumption of steel in India while exports volume has declined. This underscores the fact that Indian steel mills have always prioritised meeting domestic market requirements as part of their endeavours to accelerate India’s growth journey before considering exports,” said Ranjan Dhar, senior vice president and chief marketing officer at steelmaker AM/NS India.
