India’s iron ore exports dropped down to “almost zero” in October, and overseas shipments of the steelmaking raw material are expected to continue to weaken due to higher export taxes and lower demand from China, a senior industry official said on Thursday.
To meet the rising local demand, India in May raised the export tax on low-grade iron ore content below 58%-50% from zero and increased the duty on pellets from zero to 45%.
“In October, exports were nearly zero, and it will be so while the duty remains, R.K Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI), in an interview with Reuters.
According to Sharma, apart from the high export taxes of New Delhi, a downturn in China’s economy, India’s biggest consumer of iron ore, is also likely to affect international shipments of the steelmaking material.
However, after plunging in October, iron ore prices have recovered, with gains mostly fuelled by rumours that China might abandon its zero-COVID policy by the next year. A similar scheme has been denied by officials.
In the fiscal year that ended March 2022, China purchased 21 million tonnes of iron ore and concentrates from India, thereby purchasing 80% of New Delhi’s 26.32 million tonnes of total exports. 92% of India’s total iron ore exports were low-grade ores.
India’s iron ore exports during the first five months of the current fiscal year that began in April totalled 6.97 million tonnes, a three-year low, data compiled by FIMI showed.
Local iron ore prices in India have dropped, partly due to lower demand, said a spokesperson for state-run miner NMDC Ltd.
Domestic prices of high-grade lump ore at NMDC – the largest producer of iron ore in the country – fell 33% to 4,100 rupees ($49.45) per tonne in October from 6,100 rupees in April ..