India’s production of this steel-making raw material is up 13% in CY19

Iron ore production in India in calendar year (CY) 2019 surpassed 231 million tons (MnT) compared to CY18’s 204.7 MnT. In CY19, iron ore production grew by a whopping 12.9%. Odisha, which is the eighth largest state in India (area-wise), alone took the biggest chunk of India’s iron ore production at 130.04 MnT or 56.29% in CY19 which accounts for more than half of India’s total iron ore production. Compared to last year (CY18), this year, Odisha’s contribution to India’s total iron ore production has increased significantly.

Other iron ore producing states, including Chhattisgarh and Karnataka, maintained their performance in CY19 with incremental growth of 3.26% and 2.71% respectively. Chhattisgarh reportedly produced 35.72 MnT while Karnataka’s production volume was at 29.87 MnT in CY19.
Interestingly, Jharkhand showed some major improvement in iron ore production this year with 26 MnT, a growth of 12.88% compared to last year.

Based on India’s total iron ore production volume, it can be said that it is on a positive growth track on a year-on-year (y-o-y) basis.
National Mineral Development Corporation (NMDC) Limited, India’s largest iron ore producing company, recorded 32.6 MnT of production in CY19. However, CY19 cannot be called very favourable for NMDC as the company’s total production dropped by 1.5% compared to CY18. Out of NMDC’s total iron ore production, Chhattisgarh mines produced 24.8 MnT and Karnataka mines contributed 7.78 MnT. India’s largest private merchant miner, Odisha-based Rungta Mines’ production grew 17.1% compared to CY18, at 28 MnT in CY19. Production of other major miners, including Serajuddin Mines and Essel Mining & Industries, also jumped significantly in CY19. Essel Mining & Industries increased its production by more than two-fold to around 11 MnT in CY19 while Serajuddin Mines’ production increased by around 55.6% to 13.4 MnT. Captive miner Tata Steel’s production was up 10.3% to 14.4 MnT in CY19.

Serajuddin Mines and Essel Mining & Industries, also jumped significantly in CY19. Essel Mining & Industries increased its production by more than two-fold to around 11 MnT in CY19 while Serajuddin Mines’ production increased by around 55.6% to 13.4 MnT. Captive miner Tata Steel’s production was up 10.3% to 14.4 MnT in CY19.

India’s Iron Ore Imports In CY19
In CY19, India‘s iron ore (including pellets) imports reportedly decreased by a huge margin of around 86.13% to 2.25 MnT.

Out of this, pellets imports were recorded only at 0.05 MnT which saw a decrease of 92.96% compared to last year. Iron ore (excluding pellets) imports in CY19 decreased by 85.96% against last year. Prior to this, in CY18, the country’s iron ore imports had increased by around 180.55% reaching 16.3 MnT.

Upon taking a look at the past five years’ data of India’s iron ore imports, it can be observed that, over this period, India imported the least quantity of iron ore in CY19. There are a number of reasons responsible for this scenario, including the availability of domestic iron ore at a lower price, global iron ore shortage due to natural calamities and high global iron ore prices. For instance, in CY19, average Odisha iron ore prices can be seen hovering around INR 2,000/MT, against INR 2,600/MT in CY18.
At the beginning of CY19, Brazil’s Vale, the world’s largest iron ore miner, was hit by a dam disaster which further led to a series of events. As a result, global production of this steel-making raw material was affected badly during the year. Later on, amid material availability crises, cyclones in Australia increased the difficulties of major miners such as the BHP Group and Rio Tinto. As per analysts, the cyclone not only severely affected iron ore production, but also created logistical problems for iron ore miners.

Top 5 Iron Ore Importers In India

JSW Steel, which is counted among the largest steel makers in India, has the biggest share in India’s total iron ore imports. But in CY19 the company’s iron ore imports dropped by a massive margin of 91% to 1.06 MnT against 11.5 MnT in CY18. Kudremukh Iron Ore Company Limited (KIOCL) is the second largest iron ore importer at 0.28 MnT in CY19. Other iron ore importers in India hold a very small share compared to JSW Steel and all of them observed a fall in their iron ore import volumes.

SA Top Iron Ore Exporter To India In CY19
CY19 saw a major decline in India’s iron ore imports from all countries. Iron ore imports from South Africa were reported at around 0.8 MnT, a decrease of 76% against 3.35 MnT reported in CY18. Iron ore imports from Australia fell by 92% from 9.2 MnT in CY18 to 0.71 MnT in CY19. Iron ore imports from Brazil, Canada and Iran were also significantly low.

Top 5 Ports With Highest Iron Ore Imports

Jaigarh Port located in Maharashtra witnessed the highest iron ore import volumes of around 0.89 MnT in CY19. But when compared to last year’s figures, the port saw a decrease of 82% against 5.01 MnT recorded in CY18. Kandla Port stood as the second-largest importer at 0.33 MnT followed by Mormugao at 0.32 MnT. A significant decrease can also be observed at all other iron ore importing ports in CY19.

India’s Iron Ore Exports In CY19
In CY19, India’s iron ore export performance improved greatly compared to last year (CY18). Iron ore exports (including pellets) grew 70% on a yearly basis, reaching 32.1 MnT compared to the previous year’s exports at 18.88 MnT.
Exports of iron ore (excluding pellets) grew 79.32% to 19.08 MnT while pellets exports increased by 36.71% to 13.2 MnT in CY19.

Industry analysts believe that Indian iron ore exports picked up amid reduced material availability by major iron ore miners from Australia and Brazil. Another reason is that spot iron ore prices for the year (CY19) increased to USD 94/MT, CFR China as compared to USD 70/MT, CFR China in CY18.
The rising demand from Chinese mills and material crises in the global markets led to a rise in prices for the year. Monthly average global iron ore fines (Fe 62%) index prices in July 2019 were the highest for the year, at USD 120/MT, CFR China. The prices for the month were hovering at their five-year highs at USD 126/MT, CFR China towards early July.

Top Buying Countries Of Indian Iron Ore
China was the top buyer of Indian iron ore. China continues to remain the largest buyer of Indian iron ore as well as of pellets. In CY19, India’s iron ore & pellet exports to China increased by 64% to around 24.79 MnT in CY19 against only 15.11 MnT in CY18.
China alone accounted for a share of 77% in total Indian iron ore exports. After China, Japan is the second-largest buyer of Indian iron ore with a share of around 5% followed by South Korea with 3% share.

Top Iron Ore Exporting Companies Of India
In CY19, Rungta Mines secured the top spot by exporting 4.17 MnT of iron ore. Compared to CY18 the company’s iron ore exports increased 81% in CY19.
Not very far behind, SM Niryat is in second spot with exports of 3.98 MnT followed by Brahmani River Pellets Limited (BRPL) at 3.04 MnT.

India’s Top Iron Ore Exporting Ports In CY19
Paradip remained the largest iron ore exporting port in CY19. This year, Paradip Port’s iron ore exports increased 110% to around 13.28 MnT against CY18’s 6.32 MnT. Dhamra Port is in second spot at 4.16 MnT and Vishakhapatnam is third, reporting exports of around 3.77 MnT.

India’s Iron Ore Price Trends in CY19
In CY19, average annual prices of Odisha’s iron ore lumps of Fe 63% (5-18mm) were reported at INR 3,971/MT. The highest price was recorded in the second half of February at INR 4,600/MT, while the lowest price was observed in the first half of October at INR 3,500/MT.

The average annual price of Odisha’s iron ore fines of Fe 63% were reported at INR 1,947/MT. Prices peaked at INR 2,300/MT for one week during mid-February, while the lowest price was observed during the whole of October and the first half of November at INR 1,750/MT.

The average annual price of Karnataka’s iron ore fines of Fe 60% were reported at INR 2,045/MT while Fe 63% lumps were reported at INR 2,934/MT.
For Chhattisgarh’s iron ore fines and lumps, the highest prices were recorded in June and July. The average annual prices of Chhattisgarh iron ore fines of Fe 64% were reported at INR 2,638/MT. However, the average annual price of iron ore lumps (6-40mm) of Fe 65% were at INR 2,885/MT.

India’s Pellets Price Trends In CY19
In CY19, pellets prices jumped up twice, once in February and again in June-July. In February, Barbil pellets prices reached INR 6,200/MT while during the same time Raipur prices peaked at INR 7,612/MT and Durgapur’s at INR 6,850/MT.
Pellets prices skyrocketed again for the second time in July. Barbil prices reached INR 6,412/MT in July while Raipur’s were at INR 7,000/MT and Durgapur’s at INR 7,100/MT during June.
However, the average annual pellets (Fe 63, 6-20mm) prices of Barbil were reported at INR 5,661/MT, Raipur’s at INR 6,424/MT and Durgapur’s at INR 5,957/MT.
Industry analysts said domestic iron ore prices are set to rise by 30-40% after mining commences again from the lapsing merchant blocks in Odisha following the successful conduct of online auctions.

India’s Iron Ore Production, Consumption
Indian iron ore production and consumption are both increasing y-o-y, according to data maintained with SteelMint. In CY19, iron ore production in India increased by around 12.85% while consumption grew 10.55%.
In CY18, iron ore production, on a y-o-y basis, increased just 1.44% while consumption increased 15.03%. Prior to that, in CY17, iron ore production increased 9.38% and consumption was up 3.35%. This shows that India’s iron ore production and consumption both are on a positive growth track.