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MUMBAI, 13 July 2020: Rise in domestic steel demand since June along with strengthening of rupee against the US dollar will lead to a gradual decline in India’s steel exports in the coming months, even as domestic iron ore prices decline significantly since June, said rating agency ICRA NSE -0.08 % in a report.

“India’s steel exports were a stop-gap arrangement during the period of subdued domestic demand, where domestic steelmakers preferred to export at less remunerative prices to liquidate the existing inventory and keep their mills running,”Icra said.

A nascent recovery in domestic steel demand and the recent strengthening of the rupee against the dollar points at a possibility of reduction in steel exports in the coming months, said the agency.

Along with a decline in coking coal prices, there was a significant drop in iron ore fine prices, as reflected by a drop in NMDC’s prices from Rs. 2860 per million tonnes ex-mine in March 2020 to Rs. 1960 per million tonne in May 2020.

“Decline in iron ore prices provided some relief to domestic blast furnace players. When compared with the international prices, domestic iron ore prices remained significantly lower even after witnessing an increase in July 2020, giving a cost advantage of $103/MT of steel produced,”said Icra’s senior vice-president, Jayanta Roy.
Despite a large iron ore price differential, such large volumes of steel exports from India are not sustainable in the near term, Icra said.

Source-: https://economictimes.indiatimes.com/industry/indl-goods/svs/steel/large-volumes-of-steel-exports-not-sustainable-exports-to-decline-in-the-coming-months-icra/articleshow/76940133.cms

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