Posted on 17 Apr 2025
Steel mills located in southern India are reported to be facing a shortage of high-grade iron ore, prompting them to import material from countries such as South Africa and Australia.
In a recent development, a leading South African supplier is said to have booked a notable volume of 65% Fe iron ore for shipment in May.
Reliable sources tell Kallanish the material is being shipped in three Supramax vessels, with the majority of it destined for Vizag Steel, also known as Rashtriya Ispat Nigam Limited (RINL). However, the company has not confirmed this.
RINL, a public sector undertaking, is India’s first shore-based integrated steel plant located in Visakhapatnam, Andhra Pradesh. It has an installed liquid steel capacity of 7.3 million tonnes/year and primarily produces long products.
The company has been grappling with financial stress for some time, impacting daily operations. Recently, its lenders approved a significant restructuring plan aimed at easing the financial burden.
Despite India's substantial iron ore reserves, there is a scarcity of high-grade ore especially in the southern region, compelling even direct reduced iron producers there to rely on imports.
“India’s iron ore imports have reached around 5-5.5mt, up from just 1mt four to five years ago. These include high-grade fines and pellets sourced from Australia, Malaysia, South Africa, and even Oman,” says a Bellary-based iron ore trader. “Given the ongoing shortage, imports of such grades are likely to rise further.”
Another market source adds: “India is also importing 64-65% Fe-grade pellets into Gujarat from the Middle East. Much of this material is Iranian, rerouted through third countries due to US sanctions. Although this is more expensive than domestic supply, the shortage leaves buyers with little choice. Only Lloyds Metals produces a similar grade domestically, but they use it internally or supply to a select few.”
This shows that even though India produced around 250mt of iron ore last year, there is still not enough high-grade material and imports are likely to continue due to supply issues in some regions.
Source:Kallanish
