High export duty brings India's iron ore export to almost zero in October

India’s iron ore exports decreased to “almost zero” in October, and because of higher export taxes and weaker demand from China, foreign shipments of the steelmaking raw material are predicted to remain stagnant, according to a senior industry official on Thursday.

In an effort to keep up with the growing domestic demand, India increased the export tax on low-grade iron ore lumps and fines in May from zero to 50% and increased the duty on pellets from zero to 45%.

Exports were practically non-existent in October, and they will continue to be so as long as the duty is in place, according to R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries (FIMI), in an interview with Reuters.

A downturn in China’s economy, India’s biggest consumer of iron ore, will affect international shipments of the steelmaking material in addition to New Delhi’s higher export levies, according to Sharma.

However, after plunging in October, iron ore prices have recovered, with gains mostly fuelled by rumours that China might abandon its zero-COVID policy by the next year. A similar scheme has been denied by officials.

China purchased 21 million tonnes of iron ore and concentrates from India in the fiscal year that ended in March 2022, thereby purchasing 80% of New Delhi’s 26.32 million tonnes of total exports. 92% of India’s total iron ore exports were low-grade ores.

According to a representative for state-run miner NMDC Ltd. Who talked to ET, local iron ore prices in India have decreased, partially as a result of decreased demand.

At NMDC, the country’s largest producer of iron ore, domestic prices for high-grade lump ore dropped 33% from Rs6,100 in April to Rs4,100 ($49.45) per tonne in October.

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