The move by Indian steel mills focusing on oxygen production and diverting it for medical use instead of maintaining steel production is likely to lower steel exports in the coming months, according to a report issued by Standard & Poor (S&P) on Wednesday, May 5.
According to the S&P report, Indian steel exports during the three months ending January this year were down 14.4 percent year on year with shipments to Asian markets accounting for 67 percent of the total exports.
The report noted that exports by Tata Steel and Steel Authority of India Limited (SAIL) during the period were down 33 percent and that exports by JSW Limited were down 18 percent.
Steel industry officials said that buffer stocks available at steel mills are down from two to three days of consumption equivalent to 0.5 days of consumption equivalent and with zero oxygen stocks imminent outputs of steel will definitely be impacted.
The assessment of officials is that aggregate steel output of the domestic steel industry risks facing a fall of at least 10 percent.
As of late April, domestic steel plants were producing about 3,474 mt per day of oxygen with the entire production going for medical use and all private and government steel mills ramping up production capacities, the officials said.