India’s iron ore exports saw a near 5 per cent y-o-y increase for the April–June period (Q1FY25) to 10.25 million tonnes (mt) despite reduced demand from China, the key buyer. Indian exporters tapped into other smaller markets like Indonesia and Malaysia, trade data show.

China, despite a demand slow-down in its steel-consuming sectors like real estate, accounted for 80 per cent of the deliveries iron ore, the key steel-making raw material, or around 8.3 mt of the total shipments for the period under review.

Shipments to the neighbouring nation, however, fell 10 per cent y-o-y from 9.3 mt in the year-ago-period, data collated by consultancy firm BigMint (formerly SteelMint) show.

Over the last six years, China has been the highest buyer of Indian iron ore with its share hovering between 70 per cent in Q1FY20, before peaking over 90 per cent during the Covid years (Q1FY21 and Q1FY22). Post-Covid too, the share of Chinese buying has hovered around 80 per cent.

“In Q1, demand from China has been volatile. After a pick-up in May over April, shipments fell again in June,” a market participant told businessline. Data from BigMint show in April India exported (to China) 2.11 mt of iron ore, which in May increased to 3.75 mt but fell to 2.45 mt in June.

Demand Outlook

Market sources said iron ore exports are expected to remain volatile in the near term.

Chinese economic conditions continue to be a concern for iron-ore’s long-term demand prospects. The economy there is not growing as fast as it used to, and is becoming less steel intensive.

The property sector, the biggest source of demand for steel and subsequently iron-ore, is in the grip of a protracted crisis. The government is trying to cap steel production at or below the previous year’s level to reduce overcapacity and cut emissions. 

BNP Paribas India in its India Steel Weekly (for July 8) report said, China’s National Development and Reform Commission in a survey suggested “further weakening of steel prices in July”; and policies, announced earlier, favoring the real estate market are losing momentum and are failing to significantly boost demand.

Price movement

On Tuesday, China’s Dalian iron ore futures fell. The most traded iron–ore contracts stood at around $114.70 per tonne, down 0.5 per cent on day time trade. Indian traders say, export offers at $110 per tonne range indicate some improvement in price over June lows.

Australian iron ore prices stood at $104 per tonne (for the week July 8), down one per cent over a one-month-period when it was around $105 per tonne.