After rocketing to a five-year high of $121 per ton in July, spot iron ore prices plummeting to $90, causing panic among the country’s iron ore exporters.
With forecasts of a further slump, exports will anything but gain. Exports of iron ore had gained traction since the tailing dam burst at Vale’s key mine in Brazil earlier in January spooked supplies, triggering a sharp escalation in prices. Shipments of lower grade material from India surged as China’s steel mills showed greater appetite for sourcing iron ore of Indian origin.
International iron ore prices may tank up to $70 by the end of this calendar (2019). This price point will make iron ore unviable and dissuade exports, sources said.
After the crisis at Vale’s mine, iron ore exports from India spiked. The country closed 2018-19 with exports of 16.2 million tons (mt), overshooting iron ore imports of 12.6 mt.
The 30 percent export duty on 58 percent Fe and higher grade iron ore make it less competitive in the seaborne market. If international prices for 62 per cent Fe fines slide to $ 70-80 levels, as was the case pre-January 2019 before the Vale dam disaster, then iron ore exports by domestic miners are expected to decline going forward, sources said.
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Steel's Net Zero mission
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Global crude steel output down 8% in September
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MOIL embarks on expansion projects
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The 12 major Indian ports handled 27 mt of iron-ore during H1 of 2021, down by 17% from 33 mt recorded for the corresponding period of previous year.
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India’s crude steel production in September 2021 grew 7.2 percent to 9.547 million tons (mt) over September 2020 but was down by 3.2 percent from August 2021 output, provisional steel ministry data showed.
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