Surge in Indian iron ore exports; data shows record highs in a month

Data analysis by Braemar ACM data shows that Indian iron ore exports being transported by sea witnessed a 47% jump in March to reach 6.6mn tonnes. This is the highest monthly total on record.

Of these, cargoes to be delivered to China stands at 5.1mn tonnes This figure is also the highest in terms of the monthly record. The increases are being witnessed as China continues to diversify the sources of its raw materials and agricultural products.

Bulk cargo carriers, supramaxes carried 4m tonnes of the iron ore loaded in March, with capes carrying 1.4m tonnes. Figures collected by Braemar ACM show, WCI to Far East on supramaxes has increased three times year-on-year to $29,000/day.

After analysing figures analysts forecast global mine output witnessing a boost to an average 2.4% over 2021-2025 versus the negative 2% over the previous five years. Experts say this can be seen as an annual production growth of 378m tonnes in 2025 compared to 2020 statistics. To get an idea of the growth we can say that the boost is about India and Russia’s total output the previous year.
Increasing inputs cost and shortage in domestic supply hitting margins has got steelmakers in India, who are the world’s fourth largest iron ore producer to pressurize the authorities to implement an export ban.

India’s gain

The bottom line is that India is said to be among the countries that have come up as key beneficiaries of the ban on coal exports of Australia by the Chinese.

Experts studying the situation suggest that Indian steelmakers are now in a position to purchase Australian coal at lesser prices after China shunned it.

It should be noted that India’s fuel consumption witnessed a high in March for the first time in three months. This was a record jump since December 2019. Per month demand rose by 8.7% from February, a time when prices dropped to a five-month low.

Production likely to increase

The economic activity is slowly picking pace after COVID-19 induced slowdown and experts have forecast that China and India, the two largest steel producers will likely witness an increase of production this year.

China drives positive growth

In the international market too despite rising coronavirus cases hitting many steel consumer countries of the world, China has been able to drive the world steel production and keep it well within safe zones.

The curbs on business activities in February 2021 has not deterred China and it has been able to get its growth pace back in March 2021. Trade pundits say there will be a healthy domestic demand in the coming months.

Indian ore prices still high

The raw material scenario is quite tight with only 10 out of 19 mines recently auctioned in Odisha starting production till February 2021. As a result domestic iron ore prices have been on the higher side.

The situation is a positive as the Mines and Minerals (Development and Regulation) Amendment Bill, 2021, allows traders sale of up to 50 per cent of the annual production by captive iron ore mines owners.

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