The Ministry of Finance of India announced on November 18 that the export tariff on iron ore was to be adjusted as of November 19, with the tariff on iron ore with Fe content above 58 percent down from 50 percent to 30 percent, while ore with Fe-content below 58 percent (58 percent inclusive) would have a zero tariff.
As one of major iron ore producing countries, the annual production output of iron ore in India amounted to 200-250 million mt and India used to be a major import source of iron ore for China. However, after 2012, the share of imports from India gradually declined to a low level, accounting for less than five percent of China’s iron ore imports in recent years. In the April-June period this year, India raised the export tariff on iron ore, resulting in total imports of Indian iron ore in China amounting to 9.89 million mt in the January-September period, down by 69.4 percent year on year.
China’s imports of Indian iron ore were mostly low Fe-content, with unstable quality and fluctuating prices, and as Chinese steelmakers’ use of Indian ore is usually low when the steel mills’ profitability is good. Currently, Chinese steelmakers’ profitability is at low and this will increase the demand for Indian ore. The reduced export tariff will likely stimulate China’s demand for Indian iron ore.
