Southern India-based DRI producers book imported iron ore lumps from South Africa

• Domestic high-grade ore shortage leads to import bookings
• Global iron ore prices hover below $100/t CFR China mark

In a recent development, southern India-based direct reduced iron (DRI) traders and manufacturers booked imported high-grade iron ore lumps from South Africa, seeking to secure stable raw material supplies amid fluctuating supply and volatile pricing in the domestic market.

According to sources, around three Supramax vessels with Fe 65%-grade material have been booked, with shipment scheduled for May 2025. The material is understood to be sourced from Kumba Iron Ore, a leading South African supplier, known for its premium Fe content and low levels of alumina and silica. Indicative prices of the material booked are reportedly at around $110/tonne (t) CFR India.

“There is a growing shortage of high-grade iron ore lumps in Karnataka. Currently, only a limited number of suppliers are offering material that meets high-grade specifications. However, even the make-up of these grades has reportedly started to decline, raising concerns about consistent quality. This supply tightness has further reinforced the need for imports, particularly of South African origin, which are seen as a reliable alternative, offering higher and more consistent Fe content,” noted a major Bellary-based buyer to BigMint.

On the other hand, global iron ore prices have witnessed a steep decline recently and are now hovering below the $100/t CFR China mark. Notably, iron ore fines (Fe 62%) spot prices declined by $3.2/t to $95.65/t CFR China on 8 April 2025. Renewed US-China trade tensions weighed on sentiment, with prices falling to a six-month low, prompting Chinese mills to hold back from seaborne purchases. Prices faced downward pressure following market uncertainties, limited trading activity, and expectations of further economic weakness.

The current trend reflects a broader shift towards raw material diversification, as sponge iron makers explore alternative origins such as South Africa and Brazil to ensure cost-efficiency and operational continuity, BigMint understands.