India: Iron ore imports reach 6-year high in Nov'24 on global price drop, lower domestic dispatches

• Tight supply, price fluctuations support imports
  
  
• Australia remains largest supplier
  
  

India's iron ore imports reached 1.19 million tonnes (mnt) in November 2024, marking a six-year high. Volumes witnessed a sharp hike of around 153% m-o-m against 0.47 mnt in October and a y-o-y increase of around 42% compared with 0.84 mnt in the year-ago period, data maintained with BigMint shows.

Notably, import volumes have exceeded the level of 1 mnt in the month under review, for the first time in nearly six years, a level last recorded in December 2018.

Australia leading exporter

Australia was the largest exporter of iron ore to India at 0.77 mnt in November 2024.

Oman and Malaysia occupied the second position among the top exporters with 0.21 mnt each, witnessing a significant increase of around 320% and 250%, respectively. However, according to sources, this was largely Brazilian ore which was routed to Oman and Malaysia post-processing from these units.

JSW largest importer

JSW Steel, with an import of 1.19 mnt, stood as the leading and sole iron ore importer in November.

Port-wise imports

Amongst the ports, Krishnapatnam accounted for the major share of 0.58 mnt of imports, followed by Mumbai port at 0.42 mnt.

Factors driving iron ore imports

• Domestic supply concerns: Tight domestic supply owing to extended monsoons, coupled with strong demand, has led to a rise in import volumes to fulfill the country's industrial requirements. At the same time, domestic production has struggled to meet the increasing demand for iron ore in recent months, causing supply shortages. India's iron ore output fell sharply by 25% to 20.08 mnt in July 2024, and declined further by 5% to 19.03 mnt in August, creating a need for imports to bridge the gap.
  
  
• Global iron ore price fluctuations: The global iron ore market experienced price fluctuations in April and September, and Indian mills found it economically viable to import iron ore to maintain steady production. In August, global prices for iron ore fines (Fe 62%) fell to approximately $99/t CFR China and continued to decline, reaching around $93/t CFR China, according to data from BigMint.
  
  
• Logistical bottlenecks make imports cost-effective: Over and above the high domestic freight charges, logistical hurdles - transporters' issue impacting dispatches in Odisha which had dropped to nearly one year low in September. Logistical difficulties which intensified during the monsoon season, tilted the balance in favour of imports for some coast-based mills. Notably, Odisha iron ore dispatches had hit over one-year low in September.
  
  
• Quality issues of domestic ore: Domestic iron ore has a higher gangue content compared to imported ore. The level of alumina and silica in domestic ore is markedly higher than in Australian material. Thus, the latter is obviously better suited for sintering purposes and leads to higher efficiency in blast furnaces. Moreover, with most merchant miners having hit their EC limits, mining high grade ore became a challenge, compelling mills to look at imports more intently.
  
  

Outlook

Although import volumes have increased, the quantum is small with respect to India's overall iron ore consumption, with demand expected to reach around 350 mnt in financial year 2029-30 (FY'30). With production rebounding post monsoons and global iron ore prices recovering to over $105/t CFR China in December, fresh import bookings have slowed down, cited sources.