India’s iron ore and pellet exports in January-September 2022 plunged 63% to 13.25 million tonnes (mnt) as against 35.83 mnt seen in the same period of 2021, as per data maintained with SteelMint.
The share of iron ore exports during the period was 6.9 mnt, a sharp 73% y-o-y drop from 26.34 mnt in the same period of 2021. Pellets exports in the period under review dropped 34% to 6.24 mnt from 9.49 mnt in the same period last calendar.
Fiscal year basis: Meanwhile, on a financial year basis, exports of iron ore and pellets till date in FY23 stood at 6.98 mnt, declining steeply by 63% from 18.91 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. July saw volumes languishing to 0.51 mnt and August at 0.41 mnt. Furthermore, bulk export shipments were recorded nil in September.
Why iron ore, pellet exports sunk?
India’s government raised the export duty on iron ore of all grades and concentrates up to 50% from the previous 30% on high grade and 0% on low grade ore (less than 58% Fe).
That apart, the government slapped an export duty of 45% on pellets from nil previously.
These moves were aimed at quelling inflationary pressure. However, the tariffs hit mining activities and production hard and led to stockpiling of minerals that impacted prices.
Iron ore and pellet production increased, as per SteelMint data from 15.74 mnt in July to 15.78 mnt in August.
Prices: As per SteelMint analysis, domestic iron ore fines (Fe 57%) is assessed at INR 1,500/t ($18/t) ex-mines for Barbil, eastern India.
Outlook
India’s exports of iron ore and pellets are likely to remain negatively impacted due to the export tax. Due to the decline in exports, mineral production might also drop.
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