Lack of adequate vessel availability impacted India’s iron ore export shipments, leading to a sharp drop over Apr-Jun’21 compared to Mar’21, provisional data from customs maintained with SteelMint reveals. For instance, shipments dropped by a sharp almost 1.9 million tonnes (mn t) in Apr’21 to 3.99 mn t compared to around 5.88 mn t in Mar’21, a drop of 32% m-o-m. In May, exports dropped even further to 3.66 mn t. If compared to Mar’21 figures, May’21 exports were down around 38%. Jun’21 saw the shipments falling even further to 2.14 mn t, and compared to Mar’21, these are down almost 64%.
The steady drop in iron ore shipments can be traced to the lack of vessel availability over Apr-Jun’21, a situation that is still continuing, pushing up freight rates since the Covid second surge had gained momentum.
“The situation of vessel availability has not changed much since the second wave of Covid-19 surged. In fact, availability has gone down,” say Interocean sources. While in end-April and May, the primary cause was Covid, though some owners may have been willing to call India, presently, other reasons are adding up and these include the onset of the monsoon season, backhauls paying well, owners’ preferences to keep the vessel only in certain areas only – Persian Gulf (PG)-West Coast India (WCI)…” added the source.
As per Interocean, one iron ore cargo from Paradip to North China was heard fixed at around $25/tonne (t) whereas it was in the low $20s/t a couple of weeks ago.
While shipments to Japan and South Korea stopped from Apr onwards, because of the non-renewal of the long-term, government-to-government export contracts, volumes to China continued but these also saw a steady drop after Mar (5.45 mn t) to 3.93 mn t in Apr, 3.62 mn t in May and 2.14 mn t in June. Tight vessel availability, high freight and strict quarantine issues at Chinese ports, and little interest in low-grade ore played a key role behind the declined volumes. As per SteelMint’s assessment, Fe 57% Indian iron ore fines prices fell from $124/t CNF China in mid-May’21 to $112/t CFR levels in mid-Jun.
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