Sunday, October 1, 2023
HomeHeadlinesIndia raises export duty on iron ore, Chinese reception mixed


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

India raises export duty on iron ore, Chinese reception mixed

India has raised export duties of iron ore raw materials in an attempt to reduce the cost of domestic steel production, according to a notification released by the country’s Ministry of Finance May 21.

The new export duties came in to effect on May 22 and duties for commonly exported iron ore raw materials such as pellets have been raised to 45% from none in a market where weak margins limit the use of high-quality raw material.

Sources told S&P Global Commodity Insights that they are pessimistic on Indian exports and that the market is currently not able to bear the additional financial impact of the duties.

“Exports will stop from India with the high costs,” said an Indian pellet producer. “With the excess capacity in the market, pellet plants may shut down. The domestic Indian market will be unable to take the extra supply originally meant for exports. Iron ore prices in India will drop and pellet plants will shut down to not produce at a loss.”

Another Indian pellet producer said he firmly believes that exports from India will disappear amid the high export duties.

“Meetings have been going on, but it is too soon to say how the producers will respond to this,” said the source. “Plant maintenance or even shutdowns are very possible, given that there is already extra capacity in India.”

The source expects pellet prices in India to fall by at least 30%.

Sources had mixed views on the development having an impact in China.

“Weak steel margins and low iron ore pellet demand is still prevalent,” said a China-based trader source. “There hasn’t been much exports from India to China for a while due to the weak demand. The reduction of imports will have little effect as the usage is low,” the source added.

Chinese steel mills depend mainly on domestic pellets for their supply, with imported material from various origins used to supplement any shortfall. However, the weak steel margins have dissuaded many end-users from using higher quality iron ore such as pellets, keeping demand low.

“The main issue in China is demand, not the supply,” said another China-based trader source.

However, there were other traders who felt that the weak demand now can change rapidly when steel margins improve.

“Pellet demand can change greatly when margins increase, and the increase in export duties will affect the market for at least half a year or longer,” said a Singapore-based trader source.

The source added that portside offers of Indian pellets have risen around Yuan 50-80 from the week before as sellers expect the supply of Indian pellets to dry up.

The offer prices for Rashmi pellets were around Yuan 1,280 as of May 23, compared to around Yuan 1,200 in the week ended May 20, market sources said.

An offer for seaborne Indian pellet in the market during the week ended May 20 on a USD basis was heard to have been withdrawn, with the seller considering a price increase before placing it back on the market.

The 63% Fe blast furnace pellet was assessed at $153.35/dmt CFR North China on May 20, and the premium was assessed at $17.05/dmt CFR North China.

The spot blast furnace pellet premium to the 62% Fe Iron Ore Index assessment was at $39.85/dry mt CFR North China on May 18, after adjusting to a 65% Fe basis.

Source: Platts

Related Posts


Finance & Economy
Shipping News

Sphinx Investment Corp Increases Stake in OceanPal

On September 28, 2023, an OceanPal SEC filing revealed that Sphinx Investment Corp. had raised its ownership in OceanPal, now holding a substantial stake...

Star Bulk Announces the Repurchase of 10 Million of Its Common Shares

Star Bulk announced that it entered into a Repurchase Agreement (with OCM XL Holdings, LP, a limited partnership incorporated in the Cayman Islands, pursuant...

Trafigura announces executive leadership changes

Trafigura Group Pte Ltd. has announced an evolution of its executive team to further strengthen leadership and focus across its global activities during a...

Woori, HMM, KOBC to buy Polaris in prospective $448 mln deal – report

Polaris Shipping Co. is poised to sell its entire stake at around 600 billion won ($447.5 million) to Woori Private Equity Asset Management Co....

Pyxis Tankers Announces Closing of Ultramax JV Investment

Pyxis Tankers, an international shipping company, reported that on September 14, 2023, the Company closed on its previously announced newly formed drybulk joint venture...

Baltic index snaps 4-day winning streak as capesize rates slip

The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk...

Baltic index scales 11-month peak on strong capesize rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Baltic index scales over 9-month high on capesize surge

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Baltic index rises to over 4-month high on stronger capesize rates

The Baltic Exchange’s main sea freight index, which tracks rates for ships carrying dry...

Houston-Japan VLGC freight rates reach multi-year high

VLGC freight rates from Houston to Chiba, Japan, reached $245/mt Sept. 21 for the...

Piraeus Port reports strong H1 2023 results

The Piraeus Port Authority SA, which operates Greece’s biggest and busiest port, reported a 48.8-percent increase in pre-tax earnings for H1 2023 – 49.4...

Greece names Thessaloniki port operator preferred bidder for Volos port

Greece’s privatisation agency has named the operator of Thessaloniki port as the preferred bidder for acquiring a 67% stake in the port of Volos,...

Drewry: Port Throughput Index Down 2.1% in July

The Global Container Port Throughput Index fell 2.1% MoM in July 2023, with the small rises recorded in Africa and Oceania having been insufficient...

Vopak: Agreement with Infracapital on sale of Rotterdam chemical terminals

Vopak announces that it has reached an agreement with Infracapital on the sale of its three chemical terminals in Rotterdam (Botlek, TTR and Chemiehaven)...

Port Hedland Iron Ore Exports Edge Up 4% in August

Pilbara Ports Authority has delivered a total monthly throughput of 62.8 million tonnes (Mt) for August 2023, consistent with the August 2022 throughput. The Port...