Better prices and higher demand from China saw India’s iron ore export in February reach 3.81 million tonnes (mt), one of the highest since January 2022.
Exports rose 172 per cent, year-on-year (1.40 mt in February 2022) and 12 per cent sequentially (3.42 mt in January 2023).
According to trade data by research firm SteelMint, India’s two-month export in 2023 stood at 7.23 mt, almost half of last year’s exports. Exports in 2022 were 15.93 mt.
Export of the key steel-making raw material had plunged nearly 60 per cent y-o-y in 2022, from over 37 mt in 2021.
Trade data suggest that in February, fines and lumps sales were 2.88 mt, while concentrates and pellets export was 0.93 mt. Interestingly, in February last year, fines and lumps export was 0.17 mt; and pellet and concentrate export was 1.24 mt.
Export trend since May
Post May 2022, when the Centre imposed an export duty on iron ore, shipments saw consistent drop.
In May, overseas shipments were 2.70 mt; but dropped to 0.31 mt in June; was at 0.50 mt in July; fell to 0.41 mt in August; plunged to zero in September; stood at 0.13 mt in October; rose to 0.30 mt in November. However, in December, exports rose sharply to 2.26 mt; and has been moving up since then.
“Exports started surging mainly after the withdrawal of tariffs on iron ore and pellets in late-November last year as well as buoyant demand from China following the reopening of the economy after lifting of Covid-19 restrictions,” a trader told businessline.
China – largest buyer
According to the data, China was amongst the largest buyers, accounting for nearly 77 per cent of the shipments in 2022 and, and around 92 per cent of the shipments (3.5 mt) in February.
China’s reopening has been a key driver of global raw material prices and the benchmark (iron content 62 per cent) Australian iron ore fines prices recently touched $130 per tonne in China.
“However, spreads for steel mills (in China) have narrowed at the same time and so low-grade iron ore –Indian ore (of iron ore Fe57 per cent or below) – is preferred choice for steel-makers mainly for blending and reducing costs,” SteelMint’s said in its report.
Other export markets include Malaysia, Indonesia, Vietnam, Germany and the UAE.
Iron ore production
India’s iron ore production climbed to a 9-month high of 24.5 mnt in December and remained firm at over 24 mnt in January, as per provisional data.
Pellet production rose to a 10-month high of over 7.2 mt in January.