India's exports of iron ore and pellets fell by 9.35% in May as weak Chinese demand weighed down volume.
Exports of iron ore lumps and fines fell 4% month-on-month to 2.88 million tonne in May 2023, according to SteelMint data. Pellets and concentrate exports stood at 0.51 MT in May, a 30% month-on-month drop.
Lower exports reflect falling global demand and reduced imports by China as its construction and real estate sectors struggle to recover. Pellet exports are expected to be sluggish due to lack of "sustainability of high-grade material demand as well as higher iron ore prices in China", according to SteelMint.
Weak global demand and falling steel prices dragged down iron ore prices to hit six-month lows, with the benchmark Fe62% down $12 a tonne over April. That eroded pellet export realisations by Rs 2,000 per tonne as compared with domestic prices in April.
Lumps And Fines
China emerged as the only importer of India's lumps and fines in May. India's exports in the seaborne market coincided with the 4.5% year-on-year decline in China's overall import demand to $217.69 billion in May.
Among companies exporting iron ore, Vedanta Ltd. had the largest share with 0.64 MT, accounting for 22% of the overall lumps and fines shipments, according to SteelMint data. Rungta Mines Ltd. followed with 0.62 MT, a 12% rise over April.
Pellets And Concentrates
China was the top export destination for India's pellets in May with 0.29 MT, a 60.8% decline over April, according to SteelMint data. Indonesia and Malaysia resumed imports of the beneficiated ore segment after two months, with 75,000 tonne and over 89,000 tonne, respectively, while Korea's imports stood at 54,000 tonne. The demand from these countries is, however, irregular.
Rungta Mines accounted for 47% of total pellet exports, with 0.24 MT in the export kitty—a 52% month-on-month growth. ArcelorMittal Nippon Steel came in next with 0.13 MT, a 19% MoM growth.
China is said to be planning measures to boost the property sector. The Fe62% gained $7.25 to $109.9 per tonne on June 6. The gap between pellet export realisations and domestic prices fell to Rs 1,500 per tonne in the first week of June.
These improved conditions were a result of increased trade in lumps and fines and a stronger demand from Chinese steel mills. Any improvement in demand from the world's largest steel consumer will significantly increase its appetite for Indian iron ore.
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