India iron ore imports plummeted 63% during FY 2016

By Anil Mathews (ScrapMonster Author)

April 13, 2016 05:14:35 AM

NEW DELHI (Scrap Monster): The provisional figures released by the Indian Ministry indicates significant drop in iron ore imports by the country during the previous fiscal year. The imports totaled 5.6 million tonnes during FY16, 63% down when matched with the imports of 15.1 million tonnes during the financial year before that. The expected demand slowdown from steel sector and excess supply situation prevailing in domestic market is likely to keep iron ore imports lower in the near future.

According to data, the country’s iron ore output surged higher by nearly 20% during FY16. The production totaled 155 million tonnes as compared with the production of 129 million tonnes during 2014-’15. The output by Odisha recorded sharp jump of 70% over the year. The output by the state totaled over 80 million tonnes when matched with the output of 47 million tonnes during 2014-’15. The iron ore production by Chattisgarh and Karnataka totaled around 25 million tonnes each. The state of Goa, which saw mining bans removed during the year, recorded an output of nearly 5 million tonnes.

Meantime, iron ore exports increased considerably during FY 16. The rise in production boosted the exports of iron ore from the country. The exports grew nearly 25% over the previous year from 4.8 million tonnes to over 6 million tonnes in 2015-’16. The easy availability of cheaper iron ore domestically coupled with cut in export duty and rail freight rates turned beneficial for exporters.

Analysts noted that the sharp decline in imports is attributed to fall in domestic prices and lower steel production by domestic mills. During FY15, steel producers had to rely on import, because state-owned NMDC was reluctant to cut prices. But in FY16, NMDC cut prices sharply, thus making domestic material more preferable than imported iron ore to steel makers. The dumping of steel products from countries such as China, Russia etc., also led to lower steel production, thereby resulting in lower input of the steel making raw material.