Steel exports from Bengal hit hard
The lockdown at the beginning of the year coupled with an ongoing shortage of iron ore have dented steel export out of Bengal.
Data available with the Exim Bank, the public sector lender which facilitates overseas trade for the domestic industries, recorded iron and steel exports from Bengal fell almost 4.6 per cent during April-October compared with the corresponding period of last year.
In absolute terms, iron and steel exports stood at $695.3 million during April-October 2020-21, down from $728.5 million in April-October 2019- 20. Further, the exports of ‘products of iron and steel’ were down at $278.6 million in April-October 2020-21, from $404.2 million a year ago.
Nepal and Bangladesh are among the major export markets out of Bengal for iron and steel, which import semi finished items such as sponge iron and billets.
Indian companies compete with Chinese players in these markets. Some quantities are exported to China and the UAE also.
The state also exports finished products (tube, pipe, screws, bolts) — categorised as products of iron and steel — to destinations such as the US, Qatar, and UAE.
“We could hardly operate our plants in the first two months of the year due to the lockdown. After capacities were ramped up from June, the plant faced shortage of iron ore, crippling our ability to scale up,” a leading producer of primary steel from Bengal said.
The number of merchant mines in Odisha and Jharkhand, from where the small steel mills of Bengal used to source their iron ore, are closed, squeezing out supplies in the market.
According to one estimate, annual supply of close to 90 million tonnes has gone out of the market.
While leases of some of the mines have expired, the ones which found new owners by an auction process, did not start operations.
Steel mill owners say only 12 merchant mines in Odisha are operational at present, while at least 20 are closed. All 11 such mines in Jharkhand are not in production as well.
Moreover, exports of iron ore and pellet are on the rise, creating further shortage. Data shows iron ore exports from India during April to October 2020 grew by 60 per cent.
An Exim Bank official backed the call made by Bengal based steel makers to put a temporary ban on export of iron ore as well as pellets. The demand has been raised with Union steel minister Dharmendra Pradhan, who hails from Odisha.