Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Export of iron ores from the eastern coast of India has been hit due to the impact of cyclone Yaas, which completed its landfall on Wednesday. The closure comes at a time when domestic iron and steel manufacturers are struggling to secure iron ore supply, which has been diverted towards export markets. 


Strong winds and heavy rainfall along the coast of Odisha and West Bengal has shut down trading activities at the ports. 

The Paradip port in Odisha was closed on May 25. Operations in Haldia, Kolkata and Dharma ports have also ceased.


Exports hit domestic needs

Spike in export of iron ore has created a shortage for the domestic steel companies, threatening their existence. Media reports say this has disrupted the logistics of iron ore supply in the mining state of Odisha. 


JSW Steel was reported on the verge of closing down its steel production operations in Dolvi, Maharashtra due to lack of iron ore supply, but it continued operations on the back of its captive mine in Odisha. A company official added that moving iron ore between the mine and the plant was “a logistics nightmare”, since all trucks were already booked by exporters.


Iron ore production in FY21 dropped by 44mn mt to 202mn mt compared to FY20, due to the pandemic. India exported 60mn mt in FY21 compared to 37mn mt in FY20. 


Miners justified it by claiming that the lack of demand in domestic market led them to turn to exporting iron ore. The supply crunch caused the iron ore prices to jump 156pc to Rs 6,560/mt from Rs 2,560/mt in the last fiscal. High-grade iron ore with 64pc iron content is sold at around Rs 10,000/mt.

Leave a Reply

Your email address will not be published.