Indian iron ore export volumes for Q1 FY20
(Apr-June'19) stood at 5.21 MnT, up significantly as against 2.15 MnT in
previous quarter.
On monthly basis, iron ore export stood at 1.80 MnT in
the month of June’19 as compared to 2 MnT in May’19.
Why Indian iron ore export volumes increase in Q1 FY20?
1. Increased Chinese demand amid global supply crisis:
Chinese procurement of raw material from India picked
up amid rising global supply constraints caused due to Vale mishap and
Australian cyclone. Also, Australian major miner, Rio Tinto in June’19
announced drop in its iron ore Pilbara shipments guidance due to mine
operational challenges at the company’s Greater Brockman hub. Rio Tinto 2019
Pilbara iron ore shipment guidance is reduced to 320-330 MnT as against 333-343
MnT previously.
2. High global prices:
The spot iron ore fines (Fe 62%) index price increased
for the quarter and recorded at USD 118/MT, CFR China towards June’19 end,
hovering five years high amid material shortage . The monthly average spot iron
ore prices for Q1 FY20 witnessed at USD 100/MT as against USD 82/MT in previous
quarter. This led to high realization in exports market during the quarter.
3. Fall in iron ore inventory at Chinese Ports:
As per data compiled by SteelHome consultancy, Iron ore
inventory at major Chinese ports dropped to 115.25 MnT towards June’19 end as
against 147.6 MnT towards end of 1st quarter CY19. The inventory has fallen to
lowest levels since around 2017. Amid low stock in China, mills continue buying
expensive material to continue full-load operation.
4. Narrowing discounts of low-grade ore
Fortescue Metals Group - world's 4th largest iron ore
producer has reduced iron ore discount for SSF (super special fines) fines for
the month of Jul’19 to 7% from 11% in Jun’19. Discount from the miner has
dropped sharply from as high as 42% in Oct-Nov'18 to 33% in Feb'19, 16% in
Mar'19,13% in Apr'19 and 11% in May'19. Also, SteelMint's assessment for low
grade (Fe 57/58%) iron ore fines prices during the quarter recorded as high as
USD 87/MT, CFR China..
India iron ore exports to China increased amid rising
demand
China continued to be the largest importer of Indian
iron ore for the quarter at 4.24 MnT, up sharply against 1.54 MnT in previous
quarter. Japan stood second largest importer at 0.44 MnT followed by South
Korea at 0.15 MnT.
Source: Steel mint