- Total iron ore and pellet exports fall over 67% m-o-m to 0.7 mnt
- Exports to China plunge nearly 90% m-o-m on weaker mill margins, BF maintenance
- Firm domestic prices, lower production lead to reduced overseas sales
Morning Brief: India’s iron ore and pellet exports fell 67.2% m-o-m to 0.70 mnt in September, the lowest monthly volume in nearly four years, as shipments to China plunged 88.3% and domestic supply tightened.
The last time monthly exports were at a comparable low was in November 2022, when volumes stood at around 0.3 mnt following the imposition of export duty.
Fines and lumps exports totalled 0.15 mnt in September, while pellet shipments stood at 0.55 mnt. Malaysia remained the largest destination at 0.22 mnt, followed by China at 0.19 mnt. Weaker Chinese buying, lower Indian iron ore production and firm domestic prices reduced export volumes during the month, while softer steel mill margins and increased blast furnace maintenance weighed on the Chinese market.
Chinese demand weakens sharply
Shipments to China fell to 0.19 mnt in September from 1.63 mnt in August, accounting for most of the monthly decline in India’s overall exports. Iron ore prices fell below $100/t towards the end of September as renewed calls for steel production cuts and weak fundamentals at Chinese steelworks, particularly declining margins, weighed on market sentiment.
A brief recovery in futures and spot prices during the second half of September was driven by buyer activity as mills restocked ahead of the holidays. Trading activity subsequently remained subdued as market participants prepared for the Mid-Autumn Festival holiday period from 25 to 27 September.
Chinese steelmakers also increased scheduled maintenance at their blast furnaces, with some work due to begin in late September or early October. This further reduced near-term buying interest.
China’s port inventories showed limited movement during the month. Fines and lumps stocks rose to 136.8 mnt in the final week of September from 136.1 mnt in the final week of August, while pellet stocks edged down to 5.66 mnt from 5.71 mnt.
Lower domestic supply limits export availability
India’s iron ore production fell to a yearly low of 21.6 mnt in August amid monsoon-related disruptions and a crackdown on illegal mining in Odisha. Odisha’s iron ore dispatches declined to a more than the one-year low of 11.1 mnt in August 2026.
Lower production and dispatches reduced the availability of exportable material, while monsoon-related mining and logistics disruptions contributed to firmer domestic offers.
Increasing domestic prices reduce export incentive
Domestic iron ore prices strengthened during September, making overseas sales less attractive relative to the local market. Monthly average export offers for September stood at around INR 3,000/t for fines and lumps, compared with domestic prices of INR 3,500/t. Pellet export offers averaged INR 7,660/t against domestic prices of INR 9,530/t.
Odisha Mining Corporation’s (OMC) 19 September auctions recorded firm prices despite mixed demand. Iron ore fines bookings stood at 0.639 mnt against 1.205 mnt offered, representing 53% absorption, while winning bids rose by INR 350-950/t ($4-10/t) m-o-m, led by Jilling Fe 60-62% fines at INR 5,400/t ($56/t).
CLO absorption was stronger at 80%, with 490,000 t booked against 612,000 t offered, while weighted bids rose by INR 1,250/t ($13/t). However, around 206,000 t of CLO material was sold at base prices, indicating selective demand despite firmer auction prices.
Broader market prices also strengthened. BigMint’s Odisha Fe 62% iron ore fines assessment rose by INR 300/t ($3/t) w-o-w to around INR 5,500/t ($57/t) ex-mines in the week ended 26 September, reaching a more than four-month high. The increase followed OMC’s higher base prices for its 19 September auction, prompting miners to raise offers.
Lloyds Metals and Energy too raised iron ore fines offers by INR 150/t ($2/t) and pellet offers by INR 250/t ($3/t) in Chandrapur, Maharashtra, effective 1 October. The revision followed the miner’s previous increase in mid-September and reflected tighter ore availability amid monsoon-related mining and logistics disruptions, lower production and improved sponge iron and finished steel realisations.
Following the revision, Lloyds’ pellet offers rose to INR 11,750/t ($122/t) ex-Chandrapur, while fines FOR Raipur offers were heard at around INR 7,650/t ($80/t).
Outlook
Indian iron ore exports will remain sensitive to Chinese buying, steel mill profitability in China and the relative attractiveness of domestic and overseas sales. Weaker Chinese demand has sharply reduced shipments to India’s largest market. The pace of Chinese blast furnace maintenance and the recovery in buying activity will therefore remain important for export demand.
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