Indian Iron Ore Imports Cross 15 MnT Mark in CY18 - SteelMint Data

Indian iron ore import in CY18 hit highest ever at 15.66 MnT, according to the customs data maintained by SteelMint. The imports have increased significantly on yearly basis as against in CY'17 to 5.5 MnT.

On monthly basis, iron ore imports recorded at 1.46 MnT in Dec'18. India's imports were up by 26% M-o-M against 1.16 MnT in Nov'18. Imports have increased sharply on yearly basis against 0.38 MnT in Dec'17.

Why did iron ore import volumes increased significantly ?

High Discounts: Data shows, most of the imports are of low grade (57%) from FMG Australia. This is because steel mills enjoy high discount from miners for low grade ore, which can vary from 35-40% on index price of 62%. Demand for low grade ore has reduced in China on strict pollution norms and high margins which have prompted mills to use high grade ore and pellets.

Rising Steel Capacities: Indian steel capacities are on rise, which is also one of the key reasons for increase in imports. JSW is the largest importer in this fiscal year contributing to 73% of total Indian imports. The steel major will keep importing iron ore for its Dolvi plant (West Coast of India), which is undergoing an expansion of 10 MnT.

Lowered domestic availability pushed up prices :Owing to suspension at few major mines in Odisha over delayed penalty payment in the illegal mining case pushed up import volumes .Operational Odisha mines and NMDC raised prices during the period of mines suspension. Less availability of high domestic ore resulted in increase in import volumes.

NMDC Donimalai mines remain temporarily suspended (EC limit of 7 MnT p.a) on pending government decision. NMDC India's biggest iron ore mine has been on the negotiation with the Govt of Karnataka over its decision to impose an 80% premium on iron ore sales from Donimalai as the company's earlier license did not include the premium, as per reports.

Logistic Constraints: The unavailability of rakes adds on to preference for imports. Logistic bottlenecks leads to rise in landed cost of ore for steel plants on the coasts and so they prefer sourcing from imports.

Average global iron ore fines prices in CY18 dropped marginally

Yearly average global iron ore fines (Fe 62%) prices dropped slightly to USD 70/MT, CFR China compared to USD 71/MT, CFR China in CY17. On monthly basis, the average price dropped to USD 69/MT, CFR China as against being USD 73/MT, CFR China a month ago.

JSW Steel imports increased four folds in CY18

India's major steel maker- JSW has imported 11.41 MnT iron ore in CY18, up four folds against 2.74 MnT iron ore in CY'17 and turned out to be the largest importer. Essar Steel remained the 2nd largest importer in CY'18 at 0.52 MnT followed by Jindal SAW at 0.51 MnT.

Indian iron ore imports from Australia Increased sharply in CY18

Australia turned out to be largest exporter of iron ore to India at 9.20 MnT, up sharply against 0.76 MnT in CY17 followed by South Africa at 3.36 MnT( up 62% Y-o-Y) and Brazil at 2.67 MnT (up 19% on yearly basis).

Krishnapatnam port accounted for largest iron ore imports in CY'18

Krishnapatnam port accounted for 44% share in CY'18 iron ore imports to India at 6.96 MnT followed by Jaigarh at 5.01 MnT and Kandla at 1.68 MnT.