Insight
The return of Indian iron ore exports - blip or trend?
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
India has always been an opportunistic exporter of iron ore and has shown this once again with its swift return to the seaborne market in response to higher prices. Having been completely marginalised in 2014/15, Indian exports surged to over 20 million tonnes in 2016. Exports gathered momentum in Q1-17 and many commentators have suggested last year's total will be exceeded in 2017. We disagree. There's more to this story than meets the eye. India's low iron high alumina ore is being heavily discounted in the Chinese market to the point where realised prices are now at or below cash costs for many shippers. A trade that worked well at $85/t CFR (Q1-17 average price for 62% Fe fines) looks far less compelling at sub-$60/t CFR (our forecast for H2-17). After stabilising around 20 million tonnes in 2017, we believe Indian iron ore exports will decline over the next two years and could disappear entirely by 2020.
Table of contents
- Executive Summary
-
Indian iron ore supply – resource rich, investment poor
- Structure of supply
- Production – recent trends and outlook
- Indian iron ore consumption – great potential, poor track record
- Exports – here today gone tomorrow?
- Indian iron ore costs – burdened by transport and tax
- Conclusion – the only way is down
Tables and charts
This report includes the following images and tables:
- Chart 1: Chinese imports from India – on the rise but for how long?
- Chart 2: Indian ore is being heavily discounted in the Chinese market.
- Chart 5: The rise and fall (and rise again) of Indian exports.
- Chart 6: Indian exports by port.
- Chart 7: Discount for Indian 58% Fe versus Pilbara Blend fines.
- Chart 8: Indian cost curve, non-captive mines, unadjusted for impurities.
- Chart 3: Production by type.
- Chart 4: Production by state.
What's included
This report contains:
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