India became net steel exporter in 2013-14 after a gap of six years and is likely to maintain the momentum in 2014-15 as producers are looking to dock more overseas shipment to tide over subdued domestic consumption.
Total steel exports by India during the last fiscal stood at 5.59 million tonnes (MT), as against imports of 5.44 MT, Joint Plant Committee (JPC), a unit of the Steel Ministry, said in a report. India, now the world’s fourth largest steel maker, had been a net steel importer since 2007-08 and the trend continued till 2012-13 with 7.9 MT of imports and 5.2 MT of exports.
Before 2007-08, India’s exports were more than its imports. About 4.1 per cent higher exports and 31.3 per cent decline in imports helped India become net exporter of steel. While higher exports were driven by volatility of rupee and mismatched demand-supply situation in the country; imports were lower mainly due to slowdown in the domestic economy, JPC said.
India’s steel consumption grew by just 0.6 per cent in 2013-14, its lowest in four years, to 73.93 MT, impacted by a slower expansion of the domestic economy and lower imports. “The low growth rate in domestic steel consumption indicated that base level demand conditions continued to be weak during 2013-14,” JPC said.
Construction sector accounts for around 60 per cent of the country’s total steel demand while the automobile industry consumes 15 per cent. Both sectors were hit by a slowdown in the economy which according to Central Statistics Office estimates grew by 4.9 per cent in 2013-14, against the growth rate of 4.5 per cent in 2012-13.
Sensing poor demand in store, almost all domestic steel producers, both public and private, tried to export vigorously and showed good growth in overseas shipments last fiscal. Steel Authority of India (SAIL) had clocked a 30 per cent growth in exports in 2013-14 and aims to more than double the shipments to 1 MT in 2014-15.
Rashtriya Ispat Nigam Ltd (RINL), which exported 100,000 tonne steel last fiscal, aims to treble that in the current fiscal. Private sectors firms are also likely to follow the suit.