India: Iron ore exports fall over 25% m-o-m in Jun'23, pellet shipments stable

India's iron ore and pellet exports have edged down from 3.39 million tonnes (mnt) in May'23 to 2.66 mnt in Jun'23. While iron ore exports fell m-o-m in June, pellet exports stayed largely stable m-o-m, SteelMint data show.

Iron ore exports fell around 26% to 2.14 mnt in June against 2.88 mnt in May. Pellets exports remained stable m-o-m to 512,700 tonnes (t) in June compared to May's 511,864 t.

Country-wise exports

China was the largest importer of India's iron ore at 2.1 mnt followed by Indonesia at 55,000 t. Meanwhile, India's total iron ore exports fell sharply as China's imports dropped m-o-m in June.

China was also the largest pellet importer in June. Volumes recovered 60% m-o-m to 0.4 mnt in June against 0.29 mnt in May. Another key importer from India was Indonesia at 110,000 t.

Company-wise exports

Rungta Mines was the largest exporter in June, however volumes dropped 8% to 0.57 mnt versus 0.62 mnt in May. Vedanta shipped 0.35 mnt, down 45% m-o-m against 0.64 mnt in May.

KIOCL emerged as the largest exporter of pellets with 0.27 mnt, a significant increase as against 0.05 mnt in May. Other major exporters were AM/NS India, Rungta and BRPL.

Factors impacting export volumes

• Pellet export prices up on higher global iron ore offers: India's monthly average pellet export price index assessed by SteelMint rose by around $10 m-o-m to $108.5/t FOB India in June. Monthly average prices of benchmark Fe62%iron ore fines stood at $111/t in June, up $6/t m-o-m. This had an adverse impact on global iron ore export offers, much to the discomfort of miners. Iron ore prices were dragged down by the overall decline in global steel prices and weak demand signals from China.
  
  
• Subdued Chinese demand amidst holidays: The decline in China's imports was a key factor that dragged down India's overall exports, especially during Dragon Boat festival holidays in China. China was the lone importer last month, while Indonesia and Brazil contributed infrequently this month. However, with regard to pellets, volumes were largely contributed by China followed by Indonesia.
  
  

Outlook

Low-grade iron ore fines exports from India may remain under pressure as the monsoons have already set in, and fines are generally not preferred during the rainy season due to their higher moisture content.

However, pellet exports may increase as steelmakers are likely to prefer pellets over iron ore fines. Also, the Tangshan provincial authorities in China had recently issued massive restrictions on sintering operations for the entire month of July which may support demand for high-grade ore.