Indian Iron Ore Imports Shoot Up by 44% in FY19; Cross 12 MnT

In Mar'19, Indian iron ore import volumes recorded at 0.29 MnT.

Why did Indian iron ore imports rallied in FY'19?

1. High discounts

Amid high domestic iron ore prices, major Indian mills preferred importing ore from Brazil, Australia etc. High discounts on low grade ore on Australian ore kept Indian mills active for imports. Data shows, most of the imports are of low grade (57%) .This is because steel mills enjoy high discount from miners for low grade ore, which can vary from 35-40% on index price of 62%. Later in the last quarter, discounts narrowed on increased Chinese buying.

2. Suspension at NMDC Donimalai

In another setback for domestic iron ore supply, operations at NMDC's Donimalai mines in Karnataka have remained suspended. On 3rd Nov'18 NMDC lease got expired and was later renewed for the next 20 years but state govt has asked NMDC to pay 80% premium on iron ore sale value from Donimalai to the Karnataka state Govt. Amid levy dispute, mining operations are on hold. This might serve another reason for hike in imports.

3. Interim suspension of Odisha mines

Owing to suspension at few major mines in Odisha over delayed penalty payment in the illegal mining case can also be attributed as one of the reason. Operational Odisha mines and NMDC raised prices during the period of mines suspension. Less availability of high domestic ore resulted in increase in import volumes.

JSW Steel iron ore imports up 75% Y-o-Y in FY'19

India's major steel maker– JSW stood the largest importer contributing 72% of total iron ore imports for FY'19 at 8.90 MnT. JSW Steel's iron ore import increased by 75% Y-o-Y in FY19.

Other major importers were Gujarat based - Varsanna Ispat at 0.49 MnT followed by Essar Steel and Jindal SAW at 0.41 MnT each.

Indian iron ore imports from Australia jump more than two-fold in FY19

For FY'19, the imports marked highest from Australia at 7.20 MnT followed by South Africa at 2.68 MnT, Brazil at 2.06 MnT and small quantities from Iran, Canada and Malaysia. India's iron ore imports from Australia doubled in FY19 from 3.3 MnT in FY18.

Indian iron ore imports from Australia and Brazil dropped to nil in Mar'19 owing to supply shortage by the miner. Western Australia's Pilbara region was hit by cyclone towards Mar'19 end and Vale dam mishap together resulted in global supply shortfall.

Indian iron ore imports at Krishnapatnam port up 73% in FY19

Nearly 5.21 MnT iron ore was imported at Krishnapatnam port in FY19 against 3.02 MnT in previous year. Other major ports for Indian iron ore imports in FY19 were - Jaigarh (4.1 MnT), Kandla (1.24 MnT), Mormugao (0.47 MnT). Other ports namely Manglaore, Mundra, Tuticorine, Vizag & Paradip accounted for small quantities.