Global iron ore exports record new highs amidst surge in China demand

Iron ore exports have recorded new highs in the last two months on the back of strong demand from China, the world’s highest importing nation. Export shipments of iron ore in September 2020 were four million tonnes against 1.14 million tonnes in September 2019 as miners in Odisha, India continually booked orders from China on the back of a spike in global prices.

China, which had earlier cut iron ore imports from India due to border disputes between both countries, resumed buying again on a large scale accounting for 95 per cent of iron ore exports from India in the last two months.

As a result, the monthly average global price of iron ore exported to China increased to $122 a tonne in August and $124 in September as against $107 a tonne in July.

The surge in iron ore prices in the last four months has forced steel companies to increase their prices as well. Analysts have also forecast a further increase in iron ore prices in India as only five out of the Odisha iron ore mines are currently functioning amid a high export demand.

Iron ore availability in the second fiscal would also depend on the pace at which new merchant miners ramp up their output and industry participants who do not possess iron ore mines could face risks in iron ore availability and price in the near term, analysts reported.

However, news of the rise of iron ore imports from Brazil raises a possibility of ease in supply and a fall in global iron ore prices. Vale, the world’s largest iron ore miners located in the South American country have announced resumption of operations which is expected to bring 11,000 tonnes of daily iron ore supply back into the market.