Benchmark iron ore futures in China surged some 7% on Monday, tracking their biggest daily jump in two-and-a-half months, after India increased export duties on some commodities to rein in broadening inflationary pressures.

Asia’s third-largest economy raised export duties for iron ore and steel intermediates, with new iron ores and concentrates tariffs increased to 50% from 30% and duties on pellets hiked to 45% from zero. The government also removed import tariffs for coking coal and coke.

India is one of the major non-mainstream iron ore suppliers for China, accounting for nearly 3% of China’s total imports in 2021.

However, China’s purchase from the country fell sharply in the first four months of this year due to increasing demand in India and falling iron ore prices.

“Impact from the changes in iron ore export tariffs in India is not that significant,” said Cheng Peng, an analyst with SinoSteel Futures.

“The key issue is on the supply side, and that would have bigger impact on market expectations (that India could offset disruptions caused by the Ukraine-Russia conflict).”

The most-traded iron ore futures on the Dalian Commodity Exchange DCIOcv1, for September delivery, closed up 4.4% at 864 yuan ($129.65) per tonne, after rising as much as 6.9% to 884 yuan, their highest May 6, in early trade.

Singapore iron ore futures SZZFM2, for June delivery, edged up 0.6% to $135 a tonne.

Other steelmaking ingredients on the Dalian bourse fell, with coking coal DJMcv1 falling 2.5% to 2,567 yuan a tonne and coke prices DCJcv1 retreated from morning gains to end down 0.8% at 3,370 yuan per tonne.

Steel rebar on the Shanghai Futures Exchange SRBcv1, for October delivery, dipped 0.2% to 4,604 yuan a tonne and hot-rolled coils SHHCcv1 slipped 0.3% to 4,731 yuan per tonne.

Shanghai stainless steel futures SHSScv1 declined 2.2% to 18,535 yuan a tonne.

Source: Reuters