India: Pellets export shipments fall 35% m-o-m in Jul'22 on export duty impact

India's pellets export shipments were recorded at 55,000 tonnes (t) in July 2022, a significant fall of 35% m-o-m as against 84,300 t in June 2022, according to the vessel line-up data maintained with SteelMint.

Shipper-wise exporters

KIOCL was the sole pellet exporter in July at 55,000 t and the shipments were quite stable compared to 51,300 t in the previous month.

Oman, the sole importer

Oman emerged as the only importer of pellets from India at 55,000 t in July 2022. Export volumes remained largely stable m-o-m compared to 51,300 t in June.

Factors weighing on India pellet exports

• Imposition of export duty: In May the government imposed a steep 45% export duty on pellets from zero previously with the objective to control inflation, soaring steel prices and to ensure higher availability for the domestic industry. The duty has rendered exports unviable.
  
  
• Falling global prices: Global iron ore prices (Fe62%) fell to $131/t CFR China in mid-June 2022 from $146/t in May 2022. Prices fell further to $123/t CFR levels towards end-June.
  
  
• Shift to domestic market: With a 45% tariff on exports, domestic realisations for producers were higher than exports and so producers focused solely on the domestic market.
  
  

Outlook

India's pellet export bookings are likely to remain on the lower side as the market has turned silent after the government's imposition of the export duty. However, to compensate for the loss of the export market, producers are exploring new domestic markets via coastal routes. Those based in eastern and central India are looking to sell to buyers in Gujarat and southern India, as SteelMint recently reported.