China’s total imports of pellets and concentrate in Jan-Apr’21 were at 8.03 mn t against 12.29 mn t seen in the same four months in CY’20, a drop of almost 35% on the back of sustained crude steel production cuts, as revealed by data maintained with SteelMint.
On a year-on-year (y-o-y) basis, the country’s imports of pellets in Apr’21 were at 2.25 mn t against 3.05 mn t seen in Apr’20, down 26%.
The Apr’21 imports were more than 14% up month-on-month (m-o-m) against 1.99 mn t seen in Mar’21, mainly pulled up by India’s share.
India tops charts for 2 consecutive years
But, importantly, India contributed the largest share of China’s total imported volumes of pellets in the first four months of CY’21, at 2.98 mn t. This is the second year in a row, as revealed by SteelMint’s data, that India topped the charts. However, the volumes in Jan-Apr’21 were 6.85% lower compared to the 3.21 mn t seen in Jan-Apr’20.
India’s m-o-m exports of the material in Apr’21 shot up by 72% to 1.41 mn t compared to 8.16 lakh tonnes in Mar’21.
In fact, China was also the largest importer of Indian pellets in FY’21 at 11.04 mn t, up 7% as against 10.35 mn t in FY’20. Malaysia was the second-largest importer at 0.80 mn t, followed by Oman at 0.66 mn t.
Reasons for largest import volumes from India
- The pandemic forced Indian iron ore miners to look for exports markets, especially since international prices had skyrocketed, fetching good returns. Limited domestic offtake during the first lockdown in CY’20 propelled Indian pellet export shipments to hit an all-time high of 2.1 mn t in May’20 when Indian steel mills were running at low capacity utilisation.
- China saw falling port inventories in Jan’21 but robust domestic demand led to a sustained healthy appetite for Indian pellets. The Chinese economy has been kick-started post-its pandemic-induced slowdown with a pronounced accent on infrastructure construction. This fuelled China’s domestic demand for steel.
- However, volumes dropped somewhat in Jan-Apr’21 on production curbs in China but enhanced domestic demand for high-grade iron ore. The Tangshan administration in north China’s Hebei province suspended operations of local re-rollers since Jan to improve the air quality. Later, in the third week of Feb’21, additional restrictions were implemented due to poor air quality forecast. Recently, four steel mills in Tangshan were downgraded to D category. Curbs were also imposed on 23 steelmakers from 20-31 Mar’21 in a bid to lower emissions by 30-50%. Sintering activities were also limited which resulted in increased demand for high-grade raw material, including pellets from overseas.
- Seasonal factors like rainfall and unfavourable weather conditions in Brazil favoured Indian exports of pellets. Also, cargo dispatches from Brazil had been hit by the surging pandemic last year.
- Imports from Australia in Jan-Apr’21 had dropped a neat 25% to 6.96 lakh tonnes against 9.28 lakh tonnes in the same period in CY’20, possibly on a political stand-off between both countries at present that is impacting trade relations.
Ukraine second-largest exporter
The second-largest pellets importing country for China in Jan-Apr’21 was Ukraine with 1.33 mn t. In the same period in CY’20 the volumes were at 2.42 mn t.
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