India’s Iron ore imports will cross 7 MnT in the ongoing month, according to SteelMint Research.
In the upcoming months, there is sufficient room for imports to continue because we foresee further fall in global fines prices. Besides, Odisha government has requested the Supreme Court to grant additional 3 months time to decide on renewal of licenses for mines that are non-operational since 16 May, 2014.
Until now (01 Apr-12 Nov’14), India has already imported 5.74 MnT Iron ore, which includes 0.24 MnT Pellets. Out of the total, JSW Steel’s share is 70% i.e. 4 MnT. By the end of this month, 1.5 MnT Iron ore is expected to arrive at various Indian ports, taking total imports to 7.2 MnT. Import duty on Iron ore/Pellets is 2.5%.
The graph below shows rising Iron ore imports to India according to SteelMint Research and fall in Chinese fines (Fe 62%) prices since the beginning of FY15.
Sources mentioned that two cape-size vessels of South African Kumba lump are arriving at Indian West Coast this month, which have been imported at around USD 97/MT CFR. Also, another three shipments are to arrive at Paradip/Chennai port by Jan’15 and the material is being imported by companies namely Visa Steel, Piyarelall Sons and Kamachi Steel.
South African Iron ore lump (Fe 64%) is being offered in the price range of USD 94-100/MT CFR India for December delivery; freight charges are around USD 15/MT and delivery time is about 20 days. In addition, offers are likely to fall in upcoming months. Indian importers are also looking for Australian Iron ore concentrates, which is of superior quality. South Africa has exported 2 MnT Iron ore to India in current financial year.
Reopening of non-operational mines in Odisha & Jharkhand will take time and largely hamper domestic Iron ore availability this fiscal year. Only a few miners in Odisha are open to receive orders and at a very high price. Odisha’s Iron ore production has fallen by 21% Y-o-Y to 22.12 MnT in H1 FY15 and prices have increased by INR 1,000/MT (USD 16/MT).
On the other side, Iron ore fines (Fe 62%) prices in China are foreseen to weaken further from USD 75/MT CFR. Thus, Indian steelmakers are highly dependent on imported ore, which are economical, easily available and of superior quality; port based plants are at an advantage.
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