Indonesian stainless steel exporters kept shipments stable in July thanks to a s

2023-09-14

Indonesian stainless steel exporters kept shipments stable in July thanks to a sharp rise of supplies to India and China, while exports dropped in most other destinations.

Indonesian STS exports inched up by 0.4% to 354.1 kt in July over the month, according to the latest customs data. However, it was mainly possible due to the sharp increase of supplies to India (+185% to 80.6kt) and China (+29% to 143.5kt). Exports to most other countries, including Taiwan, Vietnam, Malaysia, Turkey, Thailand, and Korea, experience a solid reduction.

According to Indian market sources, supplies from Indonesia hiked as importers were preparing for the season of demand revival in September. “Market here was extremely weak in summer months due to monsoon season, while July shipments should arrive to India in August and then delivered to the customers in September,” a major Indian STS maker commented on the situation. Another reason for this surge was importers’ caution regarding Chinese products, as numerous complaints against Chinese imported STS made AD duties launch possible at any moment.

The rise in exports to China is mostly explained by higher production costs in the country. As a result, Tsingshan and Delong decided to enlarge sourcing from their Indonesian mills, some Chinese market insiders suggested.

In terms of product breakdown, Indonesian suppliers shifted focus from HR sheets to CR flat products, slabs, and billets. Shipments of HR sheets and coils with a width above 600 mm slumped by 85kt or 42.5% to 115.2kt over the month. Meanwhile, CR sheets exports surged by 27.8% to 121.7kt. “CR exports rise is partially attributed to rising production at recently launched CR line in Indonesia, while more HR coils were used for those CRC rolling,” an analyst at a leading Chinese STS making company told SMR. The 700 ktpy CR plant (Indonesia Yongwang) was launched as a joint venture between Tsingshan and Hongwang in January 2022. Over January-July 2023, STS HR exports dropped by 12% to 981kt, while CR supplies rose by 25% to 667.6kt.

Over the first seven months of this year, total Indonesian exports amounted to 2.29 million t, down 16.4% over the year. The country will experience more pressure on its foreign supplies as the European Commission started an investigation against Turkish, Vietnamese, and Taiwanese STS exporters, who used Indonesian feedstock for producing steel, which was then sent to the EU.

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