India’s iron ore exports slipped on an MoM basis by 10 per cent to 3.39 million tonnes (mt) indicating weak global steel demand and lower orders from key buyer markets. Orders from prime buyer, China, also declined.

Trade data showed April iron ore exports were 3.73 mt.

Iron ore is a key steel-making raw material. And China, buys almost 70 per cent of the global sea-borne iron ore and produces 50 per cent of the world’s steel.

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Data maintained by consultancy firm, SteelMint, showed on an MoM basis that there was a fall in both pellets – down 30 per cent to 0.51 mt; and lump shipments, down 3 per cent to 2.88 mt.

However, on the positive side, there was a 26 per cent rise YoY. In May 2022, the iron ore shipments out of India was 2.70 mt.

“Globally, there are not many buyers at the moment, apart from in China. And, on a YoY basis, the numbers are higher because Covid-induced restrictions there last year led to lesser exports,” a market source told businessline.

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Fall in orders

Sources said, China was the only buyer for Indian iron ore exports for the first two months of the fiscal – April and May.

However, orders from China continued to be lower than expected. Construction activities and corresponding steel demand there was yet to pick up. And accordingly, this slow down impacted orders placed from India.

Over the last one week, there is some optimism with the country’s central bank there lowering short term lending rates. As per reports, price of iron ore contracts traded in Singapore ended at $113.42 a tonne last week, up nearly 11 per cent from the low’s reported earlier in May.

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Declining inventory levels in China’s ports could also bring in some optimism on the price front in coming weeks.

Lower realisations

As per a SteelMint report, price of iron ore hit a six-month-low (in May) and the monthly average prices of the key offering (ore with 62 per cent iron content) fell by $12/tonne MoM.

“This had an adverse impact on global iron ore export offers,” a trader said, adding that this dragged down the global steel prices.

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In case of pellets, export realisations reportedly dropped for May. The drop made international prices lower than domestic offers. The second week of June has not seen much iron-ore pellet trade from India; as compared to week one, when some 55,000 tonnes were exported, a source said.

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