India’s iron ore exports dropped to “nearly zero” in October, and overseas shipments of the steelmaking raw material are expected to continue to languish due to higher export taxes and lower demand from China, a senior industry official said on Thursday.
India in May raised the export tax on low-grade iron ore lumps and fines – with iron content below 58% – to 50% from zero, and hiked the duties on pellets to 45% from zero, as part of efforts to meet rising local demand.
“In October, exports were nearly zero, and it will be so while the duty remains,” R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI), told Reuters in an interview.
Other than New Delhi’s higher export taxes, an economic slowdown in China, India’s top buyer of iron ore, would hit overseas shipments of the steelmaking ingredient, Sharma said.
He said Beijing’s strict COVID-19 curbs would also impact India’s iron ore shipments.
China’s steel production could fall in winter, dampening the demand for iron ore, Sharma said.
But global iron ore prices have rebounded after a rout in October, with gains largely driven by rumours that China would pivot away from its zero-COVID policy by next year. Officials have denied knowledge of such a plan.
In the fiscal year to March 2022, China bought 21 million tonnes of iron ore and concentrates from India, effectively buying 80% of New Delhi’s total exports of 26.32 million tonnes. Low-grade ores comprised 92% of India’s total iron ore exports.
India’s iron ore exports during the first five months of the current fiscal year that began in April totalled 6.97 million tonnes, a three-year low, data compiled by FIMI showed.
Local iron ore prices in India have dropped, partly due to lower demand, said a spokesperson for state-run miner NMDC Ltd.
Domestic prices of high-grade lump ore at NMDC – the largest producer of iron ore in the country – fell 33% to 4,100 rupees ($49.45) per tonne in October from 6,100 rupees in April.
($1 = 82.90 rupees)
(Reporting by Neha Arora; Editing by Jacqueline Wong and Mark Potter)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)