India: Iron ore exports drop, pellets exports rise m-o-m in August'23

India's iron ore and pellets exports dropped 9% to 2.87 million tonnes (mnt) in August 2023 against 3.12 (mnt) in July 2023.

However, pellets saw a 2% rise though iron ore exports decreased by around 12% m-o-m to 2.11 mnt in August against 2.39 mnt in July. Pellets exports rose by 3% m-o-m to 752,404 tonnes (t) in August compared to July's 727,411 t.

China was the largest importer of India's iron ore fines/lumps at 2.07 mnt followed by Indonesia with 47,000 t in the month of August. However, India's total iron ore exports fell sharply as China's imports decreased m-o-m in August.

China was the only pellets importer in August. Volumes rose by 29% m-o-m to 0.75 mnt in August against 0.67 mnt in July.

Rungta Mines was the largest iron ore (excluding pellets) exporter in July. Its volumes fell by 40% to 0.35 mnt in August against 0.56 mnt in July. Vedanta shipped 0.33 mnt, down 32% m-o-m from 0.48 mnt in July.

JSW exported 0.20 mnt of iron ore in August, down 39% from 0.33 mnt in July.

However, in pellets, Rungta emerged as the largest exporter with 0.37 mnt in August followed by BRPL's export volumes, dropping 62% to 0.11 mnt as against 0.29 mnt in July. Other major exporters were Mandovi River Pellet and Shri Bajrang Power And Ispat Ltd.

Factors driving iron ore & pellet exports: The benchmark Fe 62% fines index stood at $109/t in August, against $112/t CFR China in July. After dropping in early August, global iron ore fines prices picked up in China as speculation on the country's steel production controls subsided, mills resumed buying especially on declining port inventory.

On the other hand, the news of production cut led medium grade fines and pellet demand increased to feed high grade material in the furnace. Healthy import margins for mainstream medium-grade fines supported buying activities in the seaborne market.

Drop in Chinese pellet inventories: Also, the drop in pellet inventories at Chinese ports supported bookings of the material from India. Pellet inventories at China's major ports decreased to 5.2 mnt on 17 August compared to 7 mnt by end-June. Notably, volumes had surpassed the 7.5-mnt mark in May.