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India’s steel exports to remain strong in coming months

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NEW DELHI : India’s steel exports are expected to remain strong in the coming months as higher prices and regional demand would drive the steel companies to divert part of their output to exports, according to Moody’s Investors Service.

In its report ‘Steel – Asia Pacific: Higher raw material costs reduce benefit of steel price gains amid Ukraine conflict’, Moody’s Investors Service said, “We expect India’s steel exports to remain strong in the coming months.”

Moody’s also expects the domestic steel demand to grow by around 10 per cent through 2022 amid the government’s continued focus on the construction of roads, railways, ports and airports.

“Pent-up demand for autos and white goods also remain an important factor. Nevertheless, the lingering semiconductor shortage is still a deterrent to car sales,” it said.

Rated steel manufacturers with high self-sufficiency in raw materials are better positioned to withstand the risks arising from higher raw material cost and potential disruption to raw material supply.

In particular, rated steelmakers in India, Tata Steel and JSW Steel Limited, are more shielded from these risks given their backward integration into the production of key steelmaking inputs.

Korean steelmaker POSCO Holdings Inc and Chinese steelmaker China Baowu Steel Group Corporation Ltd also have moderate self-sufficiency through mining investments.

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