India slips below 10th rank in list of top exporters

Iron ore exports decline 52.5% in CY2013

Continuing the downward trend for the fifth year in a row, India’s iron ore exports declined 52.5% to 14.1 million tonnes for the calendar year 2013 (CY13). This includes 820,000 tonnes of iron ore pellets. In CY2012, the country’s exports stood at 29.7 million tonnes.

The export in 2013 is just 10% of the peak seen in 2009 and such a sharp fall has thrown out India from the global map with its ranking as an exporter of the commodity has slipped out of top 10 from the 4th last year. China is world’s largest consumer of iron ore and hence largest importer with 80-90% of global iron ore exports destined at China.

The decline in exports of iron ore was mainly due to the absence of Goa this year as compared to the previous year. Mining and transportation of iron ore in Goa was suspended in the second half of 2012 following the direction of the Supreme Court. Apart from Goa, the continuing ban on exports from Karnataka added to the drop in exports.

“The year 2013 could be the worst ever for iron ore exports and from 2014, the situation might improve but not dramatically. With more caps and bans on production and exports India may never regain its No. 3 ranking in the global export market,” according to Delhi-based OreTeam Exim Private Limited, which tracks the iron ore industry.

Apart from witnessing a massive decline in iron ore exports, the year 2013 has also seen India’s ranking going below the 10th position on the global list of top exporters of iron ore to China. Till 2011, India was behind Australia and Brazil both exporting 90-95% f their surplus to the China, and slipped to the fourth position behind South Africa in 2012.

However, in 2013, the country is pushed out of the top 10 list and stands behind even Iran, Indonesia, Malaysia and Canada among other countries, which overtook India in the export market, said Prakash Duvvuri, Head of Research, OreTeam said.

“However, the volume of exports being pushed out of the country may allow India to atleast not fall below the 10th position in near future. We expect Goan iron ore to rejoin the export race in 2014 giving some lift to the volumes,” he said.
 
On the other hand, the Indian pellet export market is likely to remain flat in 2014. Essar, JSPL, Ardent, Stemcor and GPIL among others are concentrating equally on export and domestic market will certainly help some of the pellet volumes being diverted to China and Japan, he added.
 
“India’s steel consumption and demand growth is unlikely to witness sharp growth to absorb the raw material completely within the country which is also one of the prime factors to note in 2014. With a modest growth expected off the steel sector keeping in view the change of guard at the Centre, it is highly unlikely that any major decisions would break ground at least in the first half of CY 2014,” Duvvuri said.

 
Meanwhile, on the Chinese and Japanese front, the demand for Indian iron ore and iron ore pellets will remain alive till Indian exporters have the capacity and capability to provide them with the material, he added.

China’s iron ore imports from India versus total global on calendar year basis

Total Imports into China
	(in ml tons)	Exports from India to China
		(in ml tons)	India’s Rank	Overtaken by	Total Exports from India (to all countries in ml tons)
2009	627.78	110.5	3		116.3
2010	618.63	101.9	3		107.21
2011	686.06	73.28	3	India has stayed behind Australia & Brazil	78.03
2012	745.49	27.22	4	S. Africa	29.68
2013	820.31	11.98	10	S. Africa, Iran, Indonesia, Canada, Malaysia etc	14.1
Source: OreTeam Exim Private Limited