Posted on 18 Dec 2024
*Shipments fall to 1.53 mnt in Nov'24
*Chinese demand takes a beating as steel output drops
*CY'24 export volumes may reach around 30 mnt
Morning Brief: India's exports of iron ore (excluding pellets) were recorded at 1.53 million tonnes (mnt) in November 2024 as against 1.97 mnt in October, as per BigMint assessment. India's iron ore exports are largely dependent on Chinese steel market sentiments.
Export volumes drifted down after hitting a four-month high in October which succeeded the Chinese monetary and fiscal stimulus. However, there has been a gradual tapering away of optimism after the Chinese government's efforts to stimulate the economy on the back of weak data.
Top exporters
*Rungta Mines was the largest exporter at 0.63 mnt followed by Vedanta (0.38 mnt) and OCL Iron & Steel (0.11 mnt)
*Exports to China fell to 1.26 mnt in November against 1.86 mnt in October
Factors weighing on exports
1. Fall in China's crude steel output: The decline in China's crude steel production continued. Over January-October, 2024 (10MCY'24), production fell 3% to 850 mnt compared to 877 mnt in the corresponding period of last year. After a brief spurt in October output, crude steel production seems to be on a declining trajectory, thereby hurting iron ore imports.
2. Drop in prices: BigMint's benchmark Fe 57% India iron ore fines export index fell from an average of $70/t FOB Paradip in January-November'23 to $64.5 FOB in the same period of the current calendar year. The benchmark global Fe 62% iron ore fines index has edged down from a level of $120/t CFR China in CY'23 to $110/t so far in CY'24 which is, of course, a discouragement for Indian exporters of the steelmaking staple.
3. Higher portside inventories in China: China's portside inventories have averaged around 143 mnt in CY'24 versus 124 mnt in CY'23, as per SteelHome data. Despite general slowdown in the steel market, imports have often been higher which can be attributed to buying at lower prices during certain periods to counteract the possibility of a sudden surge in seaborne prices at a later date. High inventories, however, have been a constant drag on imports.
4.Fall in exports from Karnataka: Exports from Krishnapatnam port fell from 3.59 mnt in January-November'23 to 1.7 mnt in the same period of the current year. Tighter domestic supplies amid extended monsoons resulted in lower production. Karnataka's iron ore production fell from 33.2 mnt in January-October'23 to 32.2 mnt in the same period of the current year.
Outlook
As per BigMint projection, CY'24 export volumes may be lower than CY'23. India exported 33 mnt of iron ore in CY'23, while CY'24 volumes may close at around 30 mnt.
Source:BigMint
