Iron ore imports plumetted 90 per cent (by volume) during the April-October period this fiscal as steel makers opted for domestic sourcing, amid escalating international prices.
This is the lowest level of imports recorded in the past seven years, a study by CARE Ratings said.
In the comparable period of the last fiscal, iron ore imports surged 172 per cent.
However, FY20 has seen a contrarian trend in imports as iron ore prices stayed elevated.
Steep prices prompted steel makers in the country to buy more domestically available ore and lessen dependence on imported supplies.
In the first seven months of FY20, iron ore imports stood at 0.9 million tonnes (mt) in volume terms.
At 37 per cent, South Africa had the highest share in India’s imports followed by Brazil (33 per cent), Australia (19 per cent) and Iran as well as the Philippines with six per cent share.
“In the remaining months of FY20, we expect imports to improve at a moderate pace, supported by softening global iron ore prices and signs of improvement in demand from domestic steel players. Imports by the end of FY20 are expected at about 2 million tonnes – this is still a de-growth of 85 per cent year-o-year (YoY),” said Vahishta M Unwalla, Research Analyst at CARE Ratings.
Iron ore exports from the country, too, staged a rebound in the current fiscal. From April to November, exports soared 140 per cent. In the corresponding period last fiscal, exports declined by 35 per cent.
Exports of iron ore is the highest in the past eight years, according to the CARE Ratings report. China topped iron ore sourcing from India with a staggering 83 per cent share. The country’s iron ore was also shipped to Japan, South Korea, Oman and Turkey, among others.
Exports of iron ore pellets, an intermediate product in steel manufacturing, spiked by 58 per cent YoY between April and October 2019. Three-fourths of the material was shipped to China. Steel mills in China have shown an enhanced appetite for Indian iron ore pellets with demand surging 72 per cent YoY to 5.7 mt in the period under review. Iron ore pellets were exported to Turkey, Korea, Malaysia, Oman and the UK as well.
“Exports by the end of FY20 are expected at about 25-28 million tonnes, a growth of 160 per cent YoY. Rise in global prices led to the sharp increase in demand for domestically-produced ore, along with increased demand from China for Indian pellets,” Unwalla added.
International iron ore prices headed north from the beginning of the calendar year, zooming 58 per cent between January and July. It softened from August. Between August and November, prices have fallen by 30 per cent.
“The Vale dam collapse in Brazil led to the surge in global iron ore prices in the initial seven months of the year. However, a slow steel demand globally did not help keep the prices upbeat and they gradually declined to $85 per tonne in November 2019,” the CARE Ratings report noted.