New Delhi

A year since the withdrawal of Covid restrictions in China, the country has seen increased iron ore buying from India. Nearly 92 per cent of Indian iron ore exports, or 40.40 million tonne (mt) for the 11 month period (April – February) of FY24, went to China.

In percentage terms, this is the highest ever shipment over a seven year-period (between FY18 and FY24) and second highest in volume, after 11M FY21, when exports to China stood at 47.73 mt.

In the 11M FY24 period, India’s exports stood at 44.23 mt of iron ore; up 162 per cent y-o-y. Shipments to China, increased nearly 200 per cent.

Key feedstock

Iron-ore is a key feedstock raw material for steel-making.

Over the last seven years, around 83 per cent of Indian exports went to China, data collected from research firm BigMint show.

For instance in 11M FY18, 82 per cent shipments were to China (17.6 mt out of 21.31 mt), which fell to 78 per cent next fiscal (10.51 mt out of 13.79 mt). It rose to 80 per cent (27 mt out of 34 mt) and 90 per cent respectively, in FY20 and FY21. It dropped to 88 per cent in 11M FY22 (20.84 mt out of 23.65 mt) and fell further to 81 per cent (14 mt our of 17 mt) last fiscal.

Apart from China, some of the other countries were iron ore was exported, albeit in much smaller quantity, are Malaysia and Indonesia – between 0.58 mt and 1 mt. Export to West Asian nations like Saudi, Qatar and UAE saw shipments to the tune of less than 0.2 mt.

Trade sources tell businessline, that Chinese iron-ore imports in the first two months of 2024 rose by over 8 per cent y-o-y, as steelmakers there restocked to meet production needs. The world’s largest iron ore consumer brought in 210 mt - odd for these two months.

Call For Export check

Incidentally, industry bodies, particularly secondary steel makers, have been seeking restriction on export.

In a letter to the Union Steel Minister, Jyotiraditya Scindia, the industry body, Federation of Iron Mineral Industries (FIMI), pointed out that export of iron ore and pellets have “not actually gone up” since the shipments were badly affected by export duty that was in force between May and November of 2023.

According to RK Sharma, Secretary General, FIMI, export of iron ores is mainly for fines which are of lower grade, around 58 per cent iron content. And, these have no use in the domestic market.

“In mining of ore, lumps are generated to the tune of 25-30 per cent and the rest are fines. Fines are kept in the mining lease area. Non-removal of these fines generally lead to environmental hazards; while accumulation of fines also impact lump production that actually impact availability for the steel sector,” he explained.

The Centre, though, has not announced any such curbs, but a senior ministry official said, they continue to track the situation.