monthly report steel

Steel Update - August 2021 J. M. Baxi & Company

MONTHLY REPORT

AUGUST 2021

STEEL


TABLE OF CONTENT

STEEL TRAFFIC AT INDIAN PORTS (Qty in Million Tonnes)

Country-wise Steel Imports to India July 2021

Country-wise Steel exports from India July -2021 (Qty in MT)

Major Steel Importers July -2021 (Qty In Million Tonnes)

Major Steel Exporters July -2021 (Qty In Million Tonnes)

Top 6 steel companies to foray into speciality steel

India’s long steel makers to witness better margins and higher capac-ity utilisation in H2 of FY 22

JSPL’s crude steel output grows 8 pc to 6.5 lakh tonne in July

JSW Steel optimistic about Indian demand

ArcelorMittal to invest Rs 1 lakh crore in Gujarat

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MARKET OVERVIEW AND TRENDS

PORT ANALYSIS


PORT ANALYSIS

PORT APRIL - JUN 21 APRIL - JUN 20 VARIANCE

CHENNAI 320796 451663 -130867

COCHIN 10659 0 10659

DAHEJ 35281 14566 20715

DHAMRA 313431 421618 -108187

ENNORE 138000 44344 93656

GANGAVARAM 402200 387990 14210

GOPALPUR 79717 0 79717

HALDIA 145104 562084 -416981

HAZIRA 374300 85899 288401

KANDLA 155964 322617 -166653

KARAIKAL 42000 26000 16000

KATTUPALLI 23264 5772 17492

KOLKATA 13927 27453 -13526

KRISHNAPATNAM 26750 109600 -82850

MAGDALLA 8000 130600 -122600

MANGALORE 34628 50187 -15559

MORMUGAO 524981 538460 -13479

MUMBAI 726528 515181 211348

MUNDRA 165073 213745 -48672

PARADIP 751844 972918 -221074

TUTICORIN 2409 0 2409

VISAKHAPATNAM 321417 493638 -172220

GRAND TOTAL 4616274 5374335 -758062

STEEL TRAFFIC AT INDIAN PORTS (Qty in Million Tonnes)


Country-wise Steel Imports to India July 2021 (Qty In Million tonnes)

Country-wise Steel exports from India July -2021 (Qty In Million tonnes)

COUNTRY (QTY IN METRIC TONNES)

INDONESIA 10875JAPAN 20117.03SAUDI ARABIA 202SINGAPORE 2115SOUTH KOREA 142402TAIWAN 19788.93VIETNAM 5551

COUNTRY (QTY IN METRIC TONNES)

BELGIUM 104628CHINA 88837EGYPT 20000HONG KONG 47132INDONESIA 68442ITALY 71500JORDAN 29300MYANMAR (BURMA) 6000PHILIPPINES 15000POLAND 2913PORTUGAL 3868SAUDI ARABIA 4600SINGAPORE 41000SOUTH AFRICA 20473SPAIN 12000SRI LANKA 52000THAILAND 35000TUNISIA 15000TURKEY 92536U.A.E. 61606


MAJOR STEEL IMPORTERS July -2021 (Qty in Million Tonnes)

MAJOR STEEL EXPORTERS July -2021 (Qty In Million tonnes)

IMPORTER (QTY IN METRIC TONNES)

ASHOK METAL CORPN. 27178JINDAL SAW LTD. 22105CHINA STEEL CORPN. INDIA PVT. LTD. 19788.93RATNAMANI METALS AND TUBES LTD. 15229STARCOM RESOURCES PTE LTD. 10000POSCO MAHARASHTRA STEEL PVT. LTD. 9559SIEMENS GAMESA PRENEWABLE ENERGY 7792ESSAR STEEL INDIA LTD. 7479.585ARCELOR MITTAL NIPPON STEEL INDIA LTD. 4053.747SATYAM AUTO COMPONENTS LTD. 3462METAL ONE CORPN. INDIA PVT. LTD. 2509.28WELSPUN CORPN. LTD. 2115MARUTI SUZUKI INDIA LTD. 2059.529MAHINDRA INTRATRADE LTD. 1545SATO SHOJI INDIA PVT. LTD. 1264TOSHIBA TRANSMISSION 1257MARUICHI KUMA STEEL 1165POSCO INDIA PUNE PROCESSING CENTRE 892NIPPON STEEL INDIA PVT. LTD. 813JFE SHOJI TRADE INDIA PVT. LTD. 811

EXPORTER (QTY IN METRIC TONNES)

JINDAL STEEL AND POWER LTD. 225354ARCELOR MITTAL NIPPON STEEL INDIA LTD. 174405JINDAL STEEL WORKS LTD. 168338TATA STEEL LTD. 102033RASHTRIYA ISPAT NIGAM LTD. 102000JSW STEEL LTD. 86934BHUSHAN POWER AND STEEL LTD. 79837TATA STEEL BSL LTD. 60000VEDANTA ALUMINIUM LTD. 45083STEEL AUTHORITY OF INDIA LTD. 39306BHUSAN POWER & STEEL LTD. 35500WELSPUN CORPN. LTD. 28500GODAVARI POWER & ISPAT LTD. 25000BHUSHAN STEEL AND STRIPS LTD. 20000JSW ISPAT SPECIAL PRODUCTS LTD. 16000HINDALCO INDUSTRIES LTD. 10000BEEKA STEEL INDUS. LTD. 6000JINDAL STEEL PVT. LTD. 5200JINDAL SAW LTD. 4890ECL STEEL CO. 3000KREDENCE MULTI TRADING LTD. 2004


In an endorsement for the government’s Productivity-Linked Incentive (PLI) scheme for speciality steel, India’s top six steelmakers are set to produce speciality steel within the first year of the announcement of this scheme, Union steel minister RCP Singh told ET. “The scheme has been designed with input from the industry, and the top six companies will soon enter the speciality steel sector. Six top companies – including 4 international and 2 domestic players - will enter in (producing speciality steel) the first year itself,” Singh said. Singh said that there is a huge demand for speciality steel in the country, and the scheme has been designed to benefit all segments of the steel sector a demand-driven scheme, and there is a huge demand for speciality steel,” he added. Last week, the Union cabinet approved the PLI scheme with a planned outlay of ₹6,322 crore over a period of five years. The scheme is expected to bring in investment of approximately ₹40,000 crore and will result in employment for about 525,000 people, of which 68,000 will be direct employment, the minister said.The scheme covers coated/plated steel products, high strength/wear-resistant steel, speciality rails, alloy steel products, steel wires and electrical steel. We produce around 10 mt of speciality steel, but we also import around 3-4 mt of steel used for special purposes like Indian Steel Association said that Cabinet’s decision to approve the PLI scheme for Specialty Steel would play a pivotal role in enabling growth by promoting investments for the steel industry. “We are confident that this milestone will also strengthen Governments’ vision of building a true ‘Atmanirbhar Bharat, which in turn will go a long way in accentuating India’s overall economic growth,” said Bhaskar Chatterjee, secretary, General Indian Steel Association.

Source: Economic Times

TOP 6 STEEL COMPANIES TO FORAY INTO SPECIALITY STEEL

“All of them -integrated steel mills, secondary steel mills and MSMEs in the sector - will benefit from the scheme. This is a demand-driven scheme, and there is a huge demand for speciality steel,” he added.


Steel demand rose to around 25mn t in April-June — the first three months of India’s fiscal year ending March 2022 — compared with 12mn t a year earlier when the Covid-19 pandemic stalled economic activity, company officials said. The first-quarter demand was slightly lower from 25.19mn in pre-pandemic April-June 2019. Total consumption for the year will be around 110mn t if demand picks up in the coming quarter, company officials added. India’s finished steel consumption reached 94.89mn t in fiscal 2020-21, according to the steel ministry. India was battling a spike in coronavirus cases during April-May, which forced several states to impose localised lockdowns. Argus assessed the average domestic India hot-rolled coil (HRC) price at 66,125 rupees/t ($888) to date in July, down by 4.7pc on the month. But Indian steel prices are at a discount compared with international prices or the landed cost of imports as a result of weaker demand from an accumulation of inventories amid the spike in Covid-19 cases, the company said. “The situation will stabilise probably post-July when inventories will come down substantially since exports from major Indian steel producers continue to remain stably upwards,” said Jayant Acharya, JSW’s commercial and marketing director.

Higher suppliesGlobal steel supplies rose sharply in the first half of the year in response to higher demand, driven by infrastructure spending and capital expenditure on the energy transition, JSW Steel said. Steel prices were up in the US, Europe and China in the first half of the year despite the higher supplies, the company added. “So that clearly establishes that globally, notwithstanding [the] increase in supply, notwithstanding Russia putting a 15pc tax on exports and China withdrawing a 13pc rebate incentive on exports and the European Union extending the tariff rate quota for another three years from 1 July 2021, we have seen very strong demand that is absorbing the incremental supply in the market. That is quite positive for the steel industry outlook,” said Seshagiri Rao, JSW’s joint managing director and chief financial officer. “European quotas for some of the products are exhausted but for certain other products, they are still available. We will be accordingly calibrating our exports to that market,” Acharya said. “We are developing alternate markets in and around the European regions other than the EU, in particular. Some of them we were already present, where we are increasing our supplies. We are increasing our supplies into Latin America, Mexico, apart from the Middle East and Asia,” Acharya added. The steelmaker said the cost of steel production had risen by 10pc on the quarter on account of higher iron ore and metallurgical coal prices. The company expects rising supplies to curb the rise in iron ore prices in India but for coking coal the “cost pressure will be there”. India’s largest iron ore producer state-controlled NMDC reduced its iron prices for July in line with falling steel prices in domestic and global markets.

Source: Argus Media

India’s steel demand will pick up in the coming months as consumption remains firm from a year earlier despite a hit to economic activity from a second wave of Covid-19 infections, Indian private-sector producer JSW Steel said.

JSW STEEL OPTIMISTIC ABOUT INDIAN DEMAND


The world’s leading steel and mining conglomerate ArcelorMittal would invest Rs 1,00,000 crore in different projects in Gujarat, including its steel plant at Hazira near Surat, a Gujarat government release said. ArcelorMittal Chairman Lakshmi Niwas Mittal along with the CEO of ArcelorMittal Nippon SteelIndia (AM/NS India), Dilip Oommen, called upon Gujarat Chief Minister Vijay Rupani at Gandhinagar on Friday, the release said. During the meeting, Mittal “expressed his commitment to invest Rs 50,000 crore for the expansion of Hazira-based steel plant”, said the release. Notably, AM/NS India had taken over the steel plant from Essar in 2019 following an insolvency proceeding initiated by lender banks According to the release, Mittal is also willing to invest another Rs 50,000 crore in solar energy, wind energy and hydrogen gas production in Gujarat. In all, the group would invest Rs 1,00,000 crore in the near future in Gujarat, it said. Rupani welcomed the decision and assured to provide all necessary help, the release said.


ARCELORMITTAL TO INVEST RS 1 LAKH CRORE IN GUJARAT

According to the release, Mittal is willing to invest another Rs 50,000 crore in solar energy, wind energy and hydrogen gas production in Gujarat.


India’s long steel product industry which caters to the infrastructure and construction sectors is set to witness improved margins and better capacity utilisation levels in the second half of the fiscal year amid rising demand and reduced input prices. “Following years of anaemic long-steel product demand, expects this construction activity to revive demand strongly, lifting the fortunes of large and small manufacturers alike,” said the rating agency in a report. The weak demand for long steel in the Indian markets over the past five years had impacted smaller steel manufacturers or those players using the sponge iron-Electric Arc Furnace (EAF)/Induction Furnace (IF)more severely than the larger manufacturers. ICRA expects the demand uptick stemming from the Government’s thrust on infrastructure, particularly in the rural markets, apart from the pickup in the local small ticket construction activity to lead to increased offtake from smallermanufacturers in the coming quarters. Capacity utilisations of smaller players setto increase A steep steel price rally, coupled with benign coking coal prices prevailing till May 21 led to a sharp increase in contribution margins of large players to all-time highs in FY2021 and Q1 FY2022, improving their credit profiles

On the other hand, with prices of sponge iron, scrap and non-coking coal, which are typically the raw materials used by small and medium players increasing significantly over the same period, margins of smaller players were impacted. “Smaller players were also impacted by a shortage of iron ore in the market, which larger integrated players were insulated from to an extent, because of their captive sources,” ICRA’s report said. Long steel demand grew at a 6-year CAGR (FY2016-2021) of 1.4% so far and the available demand has been

INDIA’S LONG STEEL MAKERS TO WITNESS BETTER MARGINS AND HIGHER CAPACITY UTILISATION IN H2 OF FY 22

“Following years of anaemic long-steel product demand, ICRA expects this construction activity to revive demand strongly, lifting the fortunes of large and small manufacturers alike,” said the rating agency in a report.


largely absorbed by the larger long steel manufacturers leading to significantly divergent capacity utilisation trends between large and small long-steel manufacturers. “We expect this to correct in the coming months as demand increases, pulling up capacity utilisation rates of small and medium-sized manufactures, since larger players have been operating at healthy rates anyway,” said Jayanta Roy, Senior Vice President, Corporate Sector Ratings, ICRA Easing ofiron ore prices to help long steel players During the past few weeks, iron ore prices have been correcting amid better availability in the domestic market and a decline in international prices. However, since June 2021, international coking coal prices have almost doubled. Whil large integrated steel manufacturers’ margins will continue to remain insulated from iron ore price movement, to the extent of their captive iron ore availability, the impact of higher coking coal prices will show up in the margins in H2 FY2022, with a lag of about two months for imported coking coal. ICRA expects the recent easing of iron ore prices in the country and a sharp increase in coking coal prices, besides an improvement in capacity utilisation of smaller players, to lead to a narrowing of the margin gap between these two segments going forward. “The decoupling of prices between steel and coking coal over the past several quarters has begun to correct recently. This will impact the margins of large steel manufactures in H2 FY2022. At the same time, increase in capacity utilisation and easing iron ore supply/prices in the domestic markets will benefit smaller players,” said Pavethra Ponniah, Co-Group Head - Corporate Sector Ratings, ICRA.



Jindal Steel and Power Ltd (JSPL) on Thursday said its steel output rose by 8 percent to 6.5 lakh tonne (LT) during July 2021. The company had produced 6.03 LT steel in same month of 2020, JSPL said in a statement. During the said month, the company’s sales also registered a growth of 5 per cent to 6.7 LT as compared to 6.4 LT sales in July last year. Exports accounted for more than 40 per cent of the total sales volumes due to high spot demand from international markets, the company said. JSPL Managing Director V R Sharma said, “Despite second wave of COVID related disruptions, we are on track to achieve our annual target of 8.25 MT for FY22. Further, we are seeing COVID cases come down, which will give a major relief to the industry and our customers.” Sharma further said the effective vaccination campaign driven by the Government ofIndia will encourage workers to return to construction sites and help speed up manufacturing, which will likely to boost domestic demand. Part of O P Jindal Group, JSPL has a presence in the steel, power, and mining sectors, and has invested Rs 90,000 crore across the globe.


JSPL’S CRUDE STEEL OUTPUT GROWS 8 PC TO 6.5 LAKH TONNE IN JULY

Part of O P Jindal Group, JSPL has a presence in the steel, power, and mining sectors, and has invested Rs 90,000 crore across the globe.


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