India’s iron ore and pellet exports in the January-October 2022 period plunged 63% to 13.35 million tonnes (mnt) as against 36.48 mnt seen in the same period of 2021, as per data maintained with SteelMint.
The share of iron ore exports during the period was 6.75 mnt, a sharp 75% y-o-y drop from 26.71 mnt in the same period of 2021. Pellets exports in the period under review dropped 32% to 6.6 mnt from 9.75 mnt in the same period last calendar year.
Fiscal year basis: Meanwhile, on a financial year basis, exports of iron ore and pellets till date in FY23 stood at 7.1 mnt, declining steeply by 73% from 26.39 mnt in the same period last fiscal.
Data shows that exports began to decline, particularly from June onwards, when they dropped over to 0.31 mnt from 2.70 mnt in May. August saw volumes languishing to 0.41 mnt and September saw nil shipments. However, bulk export shipments were recorded at 0.13 in October.
Why exports shrank?
The Indian government raised the export duty on iron ore of all grades and concentrates by up to 50% from the previous 30% on high grade ore.That apart, the government slapped an export duty of 45% on pellets from nil previously.
These tariffs were intended to reduce inflationary pressures. However, the tariffs had a significant impact on mining activities and production, resulting in mineral stockpiling, which further impacted prices.
Prices: As per SteelMint analysis, domestic iron ore fines (Fe 57%) is assessed at INR 1,650/t ($20/t) ex-mines in Barbil, eastern India.
Outlook
The export tax is likely to continue to have a negative impact on India’s iron ore and pellet exports. Mineral production might fall as a result of the drop in exports. India’s iron ore production fell around 3% y-o-y in the January-September, 2022 period due largely to the sharp downtrend in output since June-July after the imposition of steep export tariffs on finished steel and steelmaking raw materials.
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