Tata Steel Production back at 100% Capacity.

Due to the market conditions, steel makers like Tata Steel were forced to cut down their operations by up to 50 per cent in April. The players also had to turn to exports to find markets for their produce. However, with the relaxation of lockdown norms, the company ramped up its production in a phased manner.

Its overall India operational capacity (including Tata Steel BSL and Tata Steel Long Products) is 20.6 million tonnes per annum (MTPA). In the first quarter of 2020-21, Tata Steel India produced 2.99 million tonnes of crude steel while sales stood at 2.92 million tonnes.

Tata Steel’s production level has now recovered to 100 per cent as the company sees a revival in domestic demand in the current quarter led by a good monsoon and rural economy. The company is now less dependent on exports compared to the first quarter. The COVID-19 outbreak in India, followed by the national lockdown, impacted the steel industry severely. It disrupted the supply chain and impacted the demand as well as production.

The other area where Tata Steel is seeing demand is where the government is spending including the oil and gas sector, water conveyance systems and railways. Construction is still a bit slow but the monsoon quarter has traditionally been the weakest quarter for construction. To counter the closure of the Indian markets in April and May, Tata Steel had ramped up exports significantly by tapping new markets and improving the supply chain capability and export constituted around 50 per cent of total sales volume in April-June 2020-21

Indian steel mills reduce exports to China

Steel manufacturers are reducing dependence on China for exports, with the gradual opening up of business across the world.

Even though the country still accounts for the lion’s share of semi-finished steel exports from India, China has come off from the highs during the lockdown. According to data from the Joint Plant Committee (JPC), India exported 1 million tonnes of semi-finished steel to China during April and May, while total semi-finished steel exports stood at 1.3 million tonnes.

Steelmakers expect exports to reduce, with an improvement in domestic demand. The lockdown had pushed steel exports to record levels, with semi-finished steel in the first four months of FY21 crossing the overall volumes of semi-finished steel exports in FY20.

Finished steel exports during April-July were more than 50 per cent of total volumes of finished steel exports last year.

Most firms resorted to exports during April and May, to tide over the lockdown that hit end-users of steel. However, there was a decline in exports month-on-month. In June, finished steel exports stood at 1.5 million tonnes while semi-finished steel was at 991,000 tonnes. But in July, the corresponding figures were 1.38 million tonnes and 941,000 tonnes.

Even After Trade Tensions, China Is Importing Large Quantities of Steel From India

While many businesses have been hit during the pandemic, India’s steel exports have reportedly more than doubled between April and July and hit their highest level in at least six years. This is because of a surge of Chinese buying. 

Trade tensions between the two countries have been high since the Galwan valley face-off between the army of the two nations. While India is running a ‘self reliance’ or atma nirbhar Bharat campaign, it looks like Chinese buyers are importing steel from India in defiance of the tensions Beijing and New Delhi. Traders said reduced prices had led them to the purchase as Indian sellers sought to get rid of a surplus generated by the impact of COVID-19 on domestic demand and generate much-needed income.

Its not clear whether the sales broke any rules but the China Iron and Steel Association is reportedly monitoring them. Steel companies Tata Steel Ltd and JSW Steel Ltd were among Indian companies that sold a total of 4.64 million tonnes of finished and semi-finished steel products on the world market between April and July. In comparison, 1.93 million tonnes was shipped in the same period a year earlier.  Vietnam and China bought 1.37 and 1.3 million tonnes of steel of the 4.64 million tonnes. These  Chinese purchases are the largest since data was first collated in the current form beginning with the fiscal year April 2015-March 2016, the report states. Even though China, the world’s leading steelmaker produces vast quantities, its still importing as it has ramped up infrastructure spending.

During the first four months of the 2020-21 fiscal year, China and Vietnam together bought close to 80% of India’s total hot-rolled coils exports, the data showed, while the product constituted more than 70% of India’s steel exports.

Steelmakers hike prices by Rs 2,000 per tonne as demand improves

Indian steel sector seems to be on the road to recovery with companies increasing prices by around Rs 2000 per tonne across all products this month on the back of better demand and rising global prices. This is the second hike in less than a month after companies raised the metal price by about Rs 750 per tonne in July.

A combination of global price hike, supply correction that has happened overall in the system, and a pent-up demand as several segments are trying to make up for the lost quarters. In June the demand was very low and there were no margins, thus the price hike is well absorbed

State-run Steel Authority of India said its bookings remain strong even after the recent price hike.

Domestic steel prices are following the international price trajectory that saw a strong recovery on increasing demand from China. Car sales are slowly picking up in the country, while two-wheeler and white goods segments are doing well. Indian Railways is expected to start train service this month and the market will be bullish from then on

 

Pains suffered by the Indian Steel Industry during the Pandemic.

In April and May, covid-19 crushed domestic industrial and consumer activity. The hit on India’s biggest steel mills, which make up 65% of the country’s annual output of about 110 Million MT, was calamitous.

The industry has been left standing still. The cost of standing still has been very high.

During the pandemic, the mills’ massive blast furnaces continued to burn but made less than a third of pre-covid-19 levels of production. Why keep the blast furnaces burning for so little output? Because closure and reopening can take up to 12 weeks; the process is complex; and maintenance costs are high. This remains the nuclear option for steel makers.

In short, India’s mills continued to bear high fixed costs: firing furnaces but without making much steel. Big integrated mills posses the manufacturing and marketing agility, and capital base, to survive, with bruises. Smaller mills, which account for about a third of national output, lack the strengths to survive a trough, and many have capitulated.

Iron and steel export from India rise by more than 100% in June.

Export of iron and steel products witnessed a sharp rise of more than 100% in June, even as export of engineering goods from India registered a decline of 7.24%, said an analysis report by engineering export promotion council of India, on Friday..

A drop in domestic demand, disruption in supply chain and acute shortage of construction labour led several top steelmakers to export more than 50-60% of their sales volume during May-June period. Iron and steel recorded more than 100% growth in exports during June 2020 with shipments of $1.32 billion against $653.52 million in the same month last year.

During June, exports of iron and steel to China rose by over 1400% to $524 million from $35 million in the same month last year, to Vietnam it went up by over 700% to USD 183 million and to Taiwan, the increase was 200% to $35 million.

With unlocking of the economy, the exports should come back on track and the trend would be reflected in the June numbers.

Domestic steel prices likely to fall in Q2 due to oversupply

Steel prices are expected to fall in the second quarter of this fiscal due to oversupply, further reducing margins for domestic steel producers. A report by credit ratings agency India Ratings and Research has estimated that prices of both hot rolled coils (HRC) and rebars will fall in the coming few months.

Both HRC and rebar prices were down 3% and 4% month-on-month in June. In May 2020, steel prices temporarily rose although higher inventories were available with steel players. This was due to logistical constraints and man-power availability issues, resulting in limited supply to end-use industries which gradually re-opened post relaxations in the lockdown.

“Domestic gross spreads per tonne (realisation per tonne of steel less the raw material cost per tonne of steel) for both hot rolled coil (HRC) and rebar are expected to fall further in 2QFY21 with a further fall in steel prices due to oversupply,” the report said. “This is because domestic production will gradually increase with the easing of lockdown restrictions along with no corresponding increase in steel demand. However, rebar spreads are likely to be less impacted over the near term up to end-FY21 compared to HRC due to a likely better demand pick-up, leading to a price increase backed by the expected implementation of government spending on infrastructure.”

Indian Steel Giant JSW Group Pledges To Cut Down $400 Million Import Bill From China To Zero In Two Years

Stating that the unprovoked attack by the Chinese on Indian soil and soldiers has been a huge “wake up” call, JSW Group’s Parth Jindal on Thursday announced that his company has pledged to bring down $400 million import bill from China to zero in two years.

“The unprovoked attack by the Chinese on Indian soil on our brave jawaans has been a huge wake up call and a clarion call for action – we JSW Group have a net import of $400mn from China annually and we pledge to bring this down to zero in the next 24 months #BoycottChina,” Jindal tweeted.

The announcement came amid nationwide outrage against China after 20 Indian soldiers were killed in a violent face-off in Ladakh’s Galwan valley with Chinese troops when they attempted to unilaterally change the status quo during the de-escalation.

India imposes anti-dumping duty on certain steel imports from China, Vietnam, South Korea

In an attempt to guard domestic manufacturers against cheap imports, India imposed anti-dumping duty on imports of a certain type of steel from China, Vietnam and South Korea for a period of five years.

The provisional anti-dumping duty on imports of ‘flat-rolled product of steel, plated or coated with alloy of aluminium/zinc’ originating in or exported from China, South Korea & Vietnam shall be effective for a period of 5 yrs from date of imposition that is 15th Oct, 2019.

The imposition of anti-dumping duty on exports comes amid a border dispute with China in Ladakh which has resulted in the death of 20 Indian soldiers in clashes with Chinese troops earlier this month.

According to reports by news agencies ANI and PTI, people are burning the Chinese flag, China-made products, and effigies of President Xi Jinping.While the public has started a boycott movement by burning down Chinese products and deleting Chinese-made software, companies have also said that they will not buy equipment from Chinese companies.

GRADE C125 STEEL STRIPS

Earlier, import was the only option for this material, which was a big hassle. But now, we at BTC are regularly keeping stock of this material in various sizes, and can offer the same off the shelf.

Range:
Thickness: 0.07 mm to 4.00 mm
Width: 8 mm to 500 mm (in thickness lower than 0.6 mm, 4 mm wide material can also be supplied)
Hardness: Fully annealed material with a maximum hardness of 200 VPN & special temper material with hardness ranging from 230 VPN to 285 VPN.

This is a very special grade of steel and is mainly used for making those components where very high tensile strength & yield stress is required. It can achieve hardness of up to 58 HRC Rockwell after Hardening & Tempering.

Application: Mainly used for making Surgical Blades i.e. Scalpels, Metal Cutting Bandsaws, Knitting Needles .etc.