India's iron ore exports increased in April-June, despite falling demand from China.

Updated information on the state of the economy - July 10, 2024, 21:55. Economic indicators from China continue to raise concerns about long-term demand for iron ore. Market participants believe that iron ore exports will remain unstable in the near future.

Iron ore exports from India have increased by almost5%in annual terms for the period from April to June (the first quarter of the 2025 financial year), amounting to10.25 million tonsDespite the decline in demand from China, which is the main buyer, Indian exporters have started looking for alternative smaller markets, such as Indonesia and Malaysia, according to trade data.

Despite the slowdown in demand in steel industries such as construction, China still accounted for80%from the total volume of iron ore supplies, which corresponds to approximately8.3 million tonsfrom the total volume of exported products during the period under review. However, shipments to the neighboring country decreased by10%compared to last year, when the figure was9.3 million tonsAccording to information gathered by the consulting company BigMint (formerly known as SteelMint).

For the past six years, China has remained the largest buyer of Indian iron ore, with its share fluctuating between70%In the first quarter of the financial year 2020, it reached peak values of more than90%During the pandemic years (the first quarter of 2021 and 2022). Even after the pandemic, the share of Chinese purchases remained at around80%It should also be noted that, according to market participants, demand from China was inconsistent in the first quarter. After an increase in May compared to April, shipments fell again in June, indicating the instability of the Chinese market.

• Data from BigMint shows that in April, India exported (to China).2.11 million tonsiron ore, in May this volume increased to3.75 million tonsand in June it fell again to2.45 million tons.

Demand forecasts

Market participants expect continued fluctuations in iron ore export volumes in the short term. Economic conditions in China raise concerns about long-term demand forecasts for iron ore.

The government aims to limit steel production to levels similar to those of the previous year in order to reduce excess capacity and lower carbon emissions. BNP Paribas India, in its weekly report on the Indian steel market (dated July 8), stated that the National Development and Reform Commission of China predicted "further weakening of steel prices in July" in its survey, and the previously announced measures to support the real estate market are losing their effectiveness and are not contributing to a significant increase in demand.

Price dynamics

Last Tuesday, iron ore futures in Dalian, China, fell in price. The most actively traded iron ore contracts were around114.70 US dollarsfor a ton, what about0.5%lower compared to previous trades. Indian traders report that export offers are in the range of about110 dollars per tonindicate some improvement in prices compared to the low levels of June. Prices for Australian iron ore amounted to104 dollars per tonAs of the week of July 8,1%lower compared to the previous month, when the price was around105 dollars per ton.