How Indian iron ore industry performed in H1 FY’23?
Indian iron ore industry has witnessed remarkable changes in H1 FY’23, with respect to policies, production, prices, exports & imports.
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Production fell by around 9% y-o-y
India’s iron ore production fell 9% year-over-year to around 110.4 mnt in the H1FY23 (Apr’22-Sep’22) compared to 120.74 mnt in the same period last year.
Apart from monsoons, production volumes also fell due to the steep export duties imposed on finished steel and raw materials such as iron ore and pellets in the third week of May.
Odisha, the largest iron ore producing state, had a share of over 57% in the country’s overall production in the first six months of financial year 2023, although total output fell to around 63.05 mnt from more than 70 mnt in the same period last year. Share of captive has gone up significantly post the mine block auctions in the state.
Prices drop over around 50%
Iron ore prices in India have dropped rapidly over the first six months of FY’23. The rapid decline is more evident in Odisha. SteelMint's Odisha iron ore fines (Fe 62%) index fell by 49% to INR 4,130/t ex-mines compared to INR 8,100/t ex-mines in H1FY’22.
Odisha iron ore prices began to rise in February-March as global iron ore prices surpassed $160/t CFR mark. Later, due to low demand, a drop in pellet and sponge prices pushed iron ore prices down, with the index hitting 2 years low in Jul'22. Furthermore, low-capacity utilization from pellet and sponge players, combined with high coal prices, has slowed demand for iron ore over a period of time.
Imports continue to remain low
India’s iron ore imports stood at 0.24 mnt in the H1FY'23, showing against Nil in H1FY'22.
Exports take a hit post hike in duties
India's iron ore and pellet exports in April-September 2022 plunged 63% to 7 million tonnes (mnt) as against 18.9 mnt seen in the same period of FY22, as per data maintained with SteelMint.
India's government raised the export duty on iron ore of all grades and concentrates up to 50% from the previous 30% on high grade and 0% on low grade ore (less than 58% Fe).
That apart, the government slapped an export duty of 45% on pellets from nil previously.
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