India’s iron ore exports soared in May as mining companies with expired leases accelerated shipments while iron ore demand was robust in China.
Iron ore exports more than doubled on-month from 1.6mn t in April to 3.91mn t in May, the highest monthly export volumes since Mar’17, according to SteelMint data.
Strong demand from steelmakers and shrinking portside iron ore inventories lifted imported iron ore prices in China, encouraging increased shipments from Indian ore producers. The Fe 58/57% CNF Qingdao, China price for Indian iron ore fines has increased by around 23% in the 29 Apr’17 June period at $69.5/t, according to SteelMint data.
Odisha-based mining companies, which have lost their mining leases in recent auctions, have also lifted export shipments to reduce stocks in the mandated six-month grace period for clearing off their unsold inventories.
The state has auctioned off 21 iron ore mines with a total 80-85mn t/yr run-of-mine capacity whose leases expired on 31 March 2020.
Domestic dispatches from Odisha have been muted in April and May at 2mn t and 3.1mn t respectively as new leaseholders have yet to start production, though 21 mines including JSW and ArcelorMittal have received government approvals that will allow them to start operations soon. Logistical hurdles due to coronavirus-related road transport restrictions also led to slower dispatches in April and May.
Odisha dispatches were at 6.5-10mn t/month in the October 2019-March 2020 period.
There was a huge jump in dispatches in November, December, January and February as mines raced to produce as much as permitted before leases expired in March. Dispatches also increased on stocking by large steel and pellet makers on fears of disruption.
Dispatches by Karnataka returned to the typical 2-3mn t/month levels in May after a sharp drop to 500,000t in April which was largely due to the nationwide lockdown imposed to control coronavirus infections.
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