India: Iron ore import shipments surge in CY'21 on declining global prices

India registered a 155% increase in iron ore imports at 1.15 million tonnes (mn t) in CY'21 compared to 0.45 mn t in CY'20, data maintained with SteelMint shows. Notably, India's iron ore imports which remained nil since Feb'21 resumed after a long gap of 10 months in Nov'21 after global prices crashed from end-Sept'21.

South Africa leading exporter

South Africa continued to be the largest exporter of iron ore to India at 0.81 mn t in CY'21. Import volumes from South Africa witnessed a whopping increase of 286% on year as against 0.21 mn t in CY'20.

Australia occupied the second position among the top exporters' list in CY'21 with 0.25 mn t followed by Ukraine with 0.08 mn t. Imports of iron ore from Australia rose sharply by 316%, y-o-y.

Shipper wise importers in CY'21

JSW Steel was the leading iron ore importer in CY'21 at 0.36 mn t, up against 0.08 mn t in the previous year. Apart from JSW, Gujarat and southern India coast-based steel mills also actively imported iron ore lumps from South Africa.

Falling global iron ore prices drive up imports

A sharp correction in global iron ore prices resulted in an increase in import bookings. The benchmark Fe 62% Australian fines prices, after touching the dizzying heights of more than $230/tonne (t) around the third week of May'21, plummeted to $90/t CFR China levels in end-Sept'21. Consequently, falling prices found parity with Indian domestic iron ore and pellet prices. Domestic prices of iron ore were hovering at around INR 6,700-7,000/t and that of pellets at INR 12,400/t in end-Sept'21.

Outlook

Global iron ore prices extended gains this week on strong demand for finished steel. The spot price of benchmark iron ore Fe 62% fines moved up by around $7/t w-o-w to $125/t CFR China on 5 Jan'22. On the other hand, domestic iron ore prices in India have witnessed a correction. PSU miner NMDC has cut iron ore prices by INR 300-500/t for Jan'22 deliveries. Fines prices have witnessed a comparatively sharper correction than lumps. The miner's fines offer has hit over one-year lows.

With the rise in global prices and drop in Indian domestic iron ore prices, import bookings for the raw material have slowed down.