India: Iron ore exports decrease sharply in FY'22 as shipments to China fall

India's iron ore export shipments were recorded at 15.28 million tonnes (mnt) in FY'22, a sharp decline of 67% y-o-y as against 46.45 mnt in FY'21, according to vessel line-up data maintained with SteelMint.

Exports to China fall 65%

China continued to be the largest importer of iron ore from India at 15.02 mnt in FY'22. However, exports to China witnessed a sharp fall of 65% on the year compared with 43.49 mnt in the corresponding period last year (CPLY).

Malaysia occupied the second position among the top importers at 0.09 mnt followed by Indonesia at 0.08 mnt. Export volumes to Malaysia and Indonesia witnessed a significant fall of 25% and 27% respectively.

Shipper-wise exporters in FY'22

Rungta mines was the largest iron ore exporter in FY'22 at 3.95 mnt followed by Fomento Resources and Vedanta at 1.3 mnt and 1.2 mnt respectively.

Why iron ore exports fell?

• Lower Chinese buying: Indian iron ore export volumes remained on the lower side in FY'22 due to the Winter Olympics in China, a period during which the country witnessed stringent steel production curbs and preferred high-grade ore (especially lump and pellets) due to environmental concerns. As a result, the demand for low-grade fines weakened further.
  
  
• Higher export volumes in FY'21 from Odisha miners - Odisha-based miners remained active in liquidating their low-grade ore stocks in the last fiscal which pulled up the total volumes. Iron ore exports from Odisha increased as 19 iron ore mining leases that were put up for auctions were busy liquidating their inventories.
  
  
• Nil exports to Japan, South Korea: NMDC's long-term iron ore export contracts with Japanese steel mills and South Korea's POSCO were scrapped as its key sop of reduced 10% export duty from Mar'21 was removed as against the normal 30% paid by private iron ore exporters.
  
  
• Iron ore supplies ease from Brazil - Brazil was the second-largest importer in CY'21. The country exported 358.1 mnt of iron ore as against 342.9 mnt in CPLY. Brazilian miner Vale recorded total iron ore fines production at 89.42 mnt in Q3CY'21, up by 18% as against 75.7 mnt in Q2CY'21. The q-o-q growth is attributed to the gradual resumption of halted operations at Fabrica and seasonal improvement of weather-related conditions in the Northern System
  
  

Outlook: Indian iron ore exports from eastern India may remain largely range-bound. However, market sources are eyeing the final decision on the resumption of exports from Goa and Karnataka, with the hearings scheduled in the Supreme Court soon.