Domestic demand for steel nearly negligible, Indian mills are now producing almost exclusively for export. Even companies such as Steel Authority of India (SAIL), the public sector behemoth that has traditionally depended primarily on domestic demand for sales, is now looking at foreign shores, including China, to sell its products. SAIL produced 16.15 million tonnes (mt) of steel in FY20, highest among Indian producers. The 1.18 mt that it exported last year, although a fraction of its total production, was its highest ever overseas sale.
In the first two months of this fiscal, however, SAIL has been ramping up exports and building new customer relationships abroad. A spokesperson for SAIL told Mint: “With the quantum of booked export orders, physical exports during May and June of 2020 would be substantially higher than the previous period. Depending on the relative market situation, SAIL will take a call on maintaining higher export volumes during subsequent months as well. SAIL has also commenced exports to China, which is comparatively a new market for our company.”
This pattern holds true for other major Indian steel producers as well. Recovering from a brutal lockdown, after the covid-19 pandemic, China has been slowly returning to full-scale production of crude steel. So non-integrated steel mills in China and southeast Asia that depend on Chinese crude steel are now turning to imports from countries including India. SAIL’s products booked from China are primarily semi-finished steel – both billets (processed further into long products) and slabs (for flats) and hot-rolled coils.