India's iron ore exports climb in April-June amid declining Chinese demand

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India's iron ore exports climb in April-June amid declining Chinese demand

Ferrous 11 Jul 2024 10:57 AM IST The Hindu BusinessLine

India's iron ore exports increased by over 5% year on year to 10.25 million tonnes (MT) in April-June (Q1FY25) despite lower demand from China, the primary customer. Indian exporters expanded into smaller markets such as Indonesia and Malaysia, according to trade data. Despite a slowdown in its steel-consuming industries, such as real estate, China accounted for 80% of the supplies of iron ore, a vital steel-making raw material, or around 8.3 MT of total exports during the period under review.

On the other hand, shipments to the neighbouring countries declined 10% year on year from 9.3 MT the previous year, according to data compiled by consultancy firm BigMint. China has been the largest purchaser of Indian iron ore over the past six years, with a share peaked over 90% during the Covid years (Q1FY21 and Q1FY22) but hovered around 70% in Q1FY20. The percentage of Chinese purchases has remained constant at 80% even after COVID.

“In Q1, demand from China has been volatile. After a pick-up in May over April, shipments fell again in June,” a market participant told. Data from BigMint show in April, India exported (to China) 2.11 MT of iron ore, which increased to 3.75 MT in May but fell to 2.45 MT in June.

Chinese economic conditions remain a source of concern for iron-ore demand in the long term. There, the economy is expanding slowly and becoming less dependent on steel. The property sector, the largest source of demand for steel and iron ore, is experiencing a long-term crisis. The government is attempting to cap steel output at or below the prior year's level to lessen overcapacity and cut emissions.

BNP Paribas India, in its India Steel Weekly (for July 8) report, said China’s National Development and Reform Commission, in a survey, suggested “further weakening of steel prices in July”; and policies announced earlier favoring the real estate market are losing momentum and failing to significantly boost demand.

Also Read : Emissions in China’s steel industry up 13% y/y in Jan-Feb India slowly gains more influence in coking coal spot market

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India's iron ore exports climb in April-June amid declining Chinese demand

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