Steel exports for the months of April and May this year have seen a growth of over 40 per cent, touching a figure of over 600,000 tonne, over the corresponding period in 2002.

Last year during this period India exported about 400,000 tonne of finished steel and 30,000 tonne of semi-finished steel.

The Steel Authority of India Ltd alone has exported over 200,000 tonne of steel in April and May (2003), while last year the company exported only about 74,000 tonne during this period.

Similarly a senior official at Essar Steel said that the company has seen a sharp increase in its exports during these two months. However the exact export figures for Essar Steel is yet to come, he said.

"There have been healthy growth in exports but it may slowdown at a later stage in case global inventory levels of steel increase and prices drop," JP Singh, joint secretary, ministry of steel told Business Standard.

The main markets for the Indian steel producers primarily have continued to be China and the US, though a substantial chunk has been exported to the African and southeast Asian countries also.

Singh added that in case the demand in China and southeast Asian markets are sustained, Indian exports will see a satisfactory growth.

However there are indications that international prices will drop in the coming months with global production increasing by about 8.6 per cent.

Also analysts said that though China' import quotas have remained more or less unchanged, the country may actually reduce its imports from last year's level as there has been an increase in the inventory.

Similarly, the US sanctions of import orders have also become more stringent after Indian exports rose sharply into the country last year.

The export markets particularly China, which had hitherto driven the global prices, has also been witnessing a slowdown in the consumption resulting in an inventory pile up.

It is understood that the companies will also focus on the domestic market as the prices are still strong in India while in the export markets, prices have dipped significantly.

In 2002-03, the growth in the steel sector came primarily from the exports, which saw a 35 per cent jump.

"The profitability of the steel producers increased in 2002-03 primarily due to a 35 per cent jump in the export market but this year the producers are likely to look inwards with the push on infrastructure and housing," said an analyst.