Indian Flat Steel manufacturers are exporting aggressively to offset the slowdown in domestic economy.
Flat Steel exports have seen a growth of 200 per cent between April ‘13 & November’13. This is mainly due to a sudden rise in exports to countries in the Middle East. Exports to Middle East have seen a growth of approximately 100 per cent within April & November this year. Middle East countries have seen a good demand from its infrastructure sector. Experts believe that this trend is likely to continue for a brief period.
The domestic flat steel market has remained quiescent off late with no major price alterations expected in the near term. The relative slowdown in domestic demand has not given manufacturers a room to raise prices. Rising inventory levels have forced some major players to offer discounts of INR 300-500 per MT in the North region.
Industry veterans believe that demand is not improving and the domestic market is likely to remain quiet. As per sources, many plants are operating under capacity at just 60-70 per cent utilization rate.
Amidst this gloom, there exist some green shoots in the economy as manufacturers are seeing better opportunities in overseas markets due to increase in exports. Given the current slowdown, flat steel companies are aligning their strategies to benefit from a good export market.
JSW Steel, a major player in the Flat Steel segment is expected to export around 3 MnT of Steel this fiscal. The company is seeing good prospects for its flat products in the Middle East market. As per a senior spokesperson from JSW, sectors like utilities and energy are witnessing a good demand, particularly for development of water pipelines and gas pipelines. Other major player like Essar previously got an approval for its API 5L grade plates for oil & gas projects in Abu Dhabi. A favorable exchange rate and positive global sentiment is posing a win win situation for these companies.
Apart from better realization in export market, we are also seeing an emerging opportunity in some niche segment of flat steel industry. Coated Steel is one such special segment which has seen much interest from many industry players off late. Coated steel products find wide applications in industrial roofing, house roofing, walling, building panels, cold storage and warehouses, airports, false ceilings, lighting fixture, refrigerators, washing machines and air conditioners.
Major players like JSW, Essar Steel, Tata BlueScope and Bhushan are already present in this market and seeing a huge opportunity in the segment. Many players are exporting coated steel products to markets like Europe, Russia and Africa. Coated Steel market is dominated by big steel companies followed by few steel processing companies.