India: Iron ore export shipments drop to a multi-year low in Nov’21

India’s iron ore export shipments witnessed a sharp fall of 76%, m-o-m, in Nov’21 to 86,782 tonnes (t) against 365,172 mn t in Oct’21, according to vessel line-up data maintained with SteelMint. Notably, this is the lowest export volume seen since SteelMint started maintaining data in May’16.

Highlights

• Falling export prices: As per SteelMint assessment, the India Fe 57% iron ore fines index fell from $71/t CNF China at the beginning of Sept to $57/t CFR China towards end-Oct’21.
• Exports to China drop 84%, m-o-m: China continued to remain the largest importer of Indian iron ore in Nov with 54,900 t. However, Chinese imports dropped a staggering 84% compared to 350,172 t in Oct’21. In the beginning of the month, global iron ore prices fell on weak demand amidst poor steel margins. Asian iron ore prices rebounded later on the improving property market outlook in China and finished steel sales, but seaborne buying interest remained subdued.

In addition, steel production cuts in China triggered a sharp decline in iron ore shipments in recent months which, in turn, lowered the demand for raw material (especially low-grade ore of Fe 57-58% and below grades).

Exports to Japan and Korea continued to remain nil, with NMDC’s long-term export contracts to these two countries expiring at the end of the last fiscal. NMDC’s long-term iron ore export contracts with Japanese steel mills and South Korea’s POSCO were scrapped, as the key sop of a reduced 10% export duty was removed against the usual 30% paid by iron ore exporters.

Leading exporters in Nov: Rungta Mines emerged as the largest iron ore exporter with 54,900 t shipped in Nov. Bagadiya Brothers was the second-largest exporter with 31,882 t.

Shipper-wise iron ore exports in Nov’21 versus Oct’21

Qty in t, provisional data,
Source: SteelMint Research, Customs

Port-wise exports: In Nov, Dhamra Port accounted for 63% of monthly iron ore exports at 54,900 t followed by Paradip Port with 31,882 t.

Outlook

China’s iron ore demand is expected to remain soft till the end of Dec amid reduced production measures placed in the run-up to the Winter Olympics. Steel output curbs and falling global prices are factors which continue to restrict export bookings from India.