Events and Updates

Title: Lower steel production globally an opportunity for India to increase exports: JSW Steel

Posted on: 30th June 2022

Lower steel production by China and the Russia-Ukraine conflict will create a demand-supply imbalance globally, especially in Europe, creating an opportunity for India to expand its export to Europe, Middle East and the US, JSW Steel NSE -2.33 % said in its annual report.

Global steel production in the first quarter of 2022 declined 5.9% compared to last year, the company noted. The decline was largely due to lower production in China, the largest steel producing country in the world, as well as lower production in Europe. Production in China is expected to decline by around 50 million tonnes.

The Russia-Ukraine conflict is expected to reduce the supply of steel in global trade by 40-50 million tonnes in the short to mid-term. JSW Steel expects this to create supply chain disruptions, especially in Europe.

Meanwhile, global steel consumption is expected to remain relatively unchanged and increase marginally in 2022 and grow in low-single digits in 2023, the company observed.

Therefore, the production shortfall from China and the ongoing Russia-Ukraine crisis has created an opportunity for steel producing countries like India, to tap deeper into export markets, in geographies like Europe, the Middle East and the US, as per the JSW Steel annual report.

“India is a cost-competitive exporter of steel and has an opportunity to take on a larger role in the global steel trade,” the company’s chairman Sajjan Jindal said.

The company took note of the new 15% export duty levied on steel by the government last month to control inflation and said that the industry was hopeful of the government removing it soon.

“As the announcement of imposition of export duty on steel, made by the Finance Ministry, came in the backdrop of spiralling inflation in the country, the move is expected to be temporary and the industry is hopeful of its withdrawal at the earliest,” the company said in its annual report.