As we have reported earlier, Chinese iron ore miners seek anti-dumping duties against low-cost imports from Australia and Brazil. It is likely that India will be benefited if China does so.
It should be noted that more than 1,000 Chinese iron ore miners shut down their mining operations because of the huge volume of imported ore. This led to decrease in China’s crude iron ore production as steelmakers rely more on imported ore than domestic material.
Global prices moved up by 4% sharply D-o-D
Global iron ore prices also moved up by 4% and was assessed at USD 57.4/MT, CFR China on 26 Jul’16. Prime reasons behind increase in prices were tighter steel supply amid environmental inspections of mills and the China’s planning to impose anti-dumping duties against Australian and Brazilian iron ore imports.
How will India be benefited if anti-dumping duties are imposed?
If anti-dumping duties are imposed on Australia and Brazilian iron ore imports, India would be benefited as country’s ore would be more preferable.
Starting FY17, India exported around 4 MnT iron ore to China. However, in the month of June’16, India become the fourth largest iron ore exporter to China after Australia, Brazil, and South Africa. In addition, starting FY17 around 70% of the total Indian iron ore exports is done to China.
In case, anti-dumping duties are introduced, Australian and Brazilian iron ore would become more expensive.
In addition, it will be beneficial for China to take ore from India due to fewer freight transition costs. Also, Indian miners have some long-term agreement with Chinese mills to exports iron ore to them.
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