NEW DELHI: Despite the government revoking duty on steel exports in November 2022, the average monthly exports have not reached the pre-duty levels. As per the Numero Analytics data, the average monthly exports since December 2022 (till July 2023) have been 683,000 tonnes as against 1.089 million tonnes averaged in the first five months of 2022.
A 15% export duty was imposed in May 2022 on a range of finished steel products, which accounted for about 95% of India’s overall finished steel exports. The duty was in effect for over six months, and its removal coincides with a period of reduced demand due to the global economic slowdown.
Exports rose to 5.46 million tonnes in December 2022-May 2023 period from 3.17 million tonnes in June-November 2022 period last year. However, before the duty was imposed in May 2022, exports stood at 5.45 million tonnes in January-May 2022 period.
However, exports in July 2023 saw a 32.5% year-on-year growth at 648,000 tonnes. As per experts, exports haven’t yet reached the pre-duty levels due to several factors including slowdown in specific regions like Europe, and China’s realty crisis. Many countries are importing from China due to freight benefits, among others.
Experts are confident that domestic demand will compensate for sluggish export demand
The slower growth in exports is not a cause for concern as domestic demand is expected to strengthen from November onwards, feels Anil K Chaudhary, former Chairman of Steel Authority of India Ltd (SAIL) and the chief executive officer of Essar Capital's Metals and Mining Vertical.
“Domestic demand always gives better realization than in the international markets, making domestic demand more lucrative,” he said.
“India’s focus on infra spending and green energy will raise demand for steel. Exports are gradually picking up after removal of duty on certain products, but are range-bound due to softening global steel prices,” said an industry expert, who didn’t wish to be quoted.