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Australia emerges as largest exporter of Iron ore to India

Australia was the largest exporter of iron ore to India in the 2017-18 fiscal year ended 31 March after being a marginal supplier for the past several years according to official sources.

Australia replaced South Africa and Brazil as the major suppliers to India. Australia exported 2.86mn t of iron ore in 2017-18, around 33pc of total Indian imports, compared with 5,539t in 2016-17, according to government data.

Most of the exports from Australia probably came from Fortescue Metals, which has shipped over 2million tons of medium-grade fines to India since January 2018. The buyer was possibly a large-scale Indian steel mill with a west coast-based plant that increased its use of Fortescue’s fines as the spread between 62 and 65per ent Fe fines widened, said market participants.

South Africa exported to India 2.74 million tons of iron ore in 2017-18 compared with 2.38million tons in 2016-17, while Brazil’s exports were at 2.17million tones compared with 1.73million tones over the same comparison.

Total imports by India increased by 89per cent in 2017-18 to 8.7million tones from 4.6million tones in 2016-17. Most of India’s iron ore imports are by coastal mills that have the flexibility of weighing up domestic and imported prices and import opportunistically. But a portion of the imports of plus 65pc Fe fines and concentrate are also done to increase blast furnace productivity and lower impurities in the furnace burden.

India’s domestic iron ore output increased in 2017-18 to 210.28million tones compared with 192.08million tones in 2016-17 and 158million tons in 2015-16, according to preliminary figures released by the ministry of mines. This is poised to slide in 2018-19 as the Supreme Court has suspended mining in west India’s Goa state since 15 March. But since most of Goa’s output was exported to China this will not affect domestic availability that is currently sufficient to meet steel mills’ requirements.

India’s iron ore exports fell by around 21pc to 24.38millin tons in 2017-18 compared with 30.72million tones in 2016-17.

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