Indian iron ore imports is projected to cross 15 million tonnes (MnT) by the end of this fiscal, which could be an all time high. Imports of iron ore is the highest since 2014-15 when the country imported a record 15 MnT as domestic output had slumped to multi-year low of 129 MnT due to mining bans in Odisha and Jharkhand.
In the April – Nov period of this fiscal, imports have been recorded at 9.65 MnT, of which 7.30 MnT has been imported by JSW steel.
High discounts, rising steel capacities & NMDC mining suspension are supporting imports
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 75.64% 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 at an estimated cost of Rs 15,000 crore.
NMDC Mining Suspension: NMDC’s Donimalai mine in Karanataka with an annual output of 6-6.5 MnT has been shut since 1st week of Nov, 2018.The state renewed the 50 year old lease for another 20 years but decided to levy 80 per cent premium on sales from the mine. NMDC has filed their case in mines tribunal, but if the case goes in court, operations will likely remain disrupted for at least 3-4 months.
3rd Indian Iron Ore & Pellet Summit
Will Indian imports of iron ore remain on the upswing in the year to come? This, among other pressing issues, will be incisively deliberated at the 3rd Indian Iron Ore & Pellet Summit to be held on 18 & 19 February, 2019 in Delhi NCR. Be there.