India reverses tariff hikes on iron ore exports as domestic oversupply hurts producers
Published: Nov 20, 2022 09:18 PM
Iron ore Photo:VCG

Iron ore Photo:VCG

After about six months, India has reversed tariff hikes on exports of low-grade iron ore and other related products. Chinese experts said that the move is taken to ease domestic oversupply in India.

Taking effect on Saturday, export duties on specified pig iron and steel products as well as iron ore pellets were lifted or reduced, according to Indian news outlet PTI.

The export duty on iron ore lumps and fines with less than 58 percent iron content will be zero. In the case of iron ore lumps and fines with more than 58 percent iron, the rate of duty will come back to 30 percent, PTI reported.

New Delhi's export tax increases in May hurt domestic miners and producers, and led to oversupply in the nation, experts said on Sunday. 

India's domestic demand for iron ore has seen a decrease recently, driving New Delhi to take measures to boost exports, Wang Guoqing, research director at Beijing Lange Steel Information Research Center, told the Global Times.

Yet, whether India raises or cuts export taxes on iron ore, it has a limited impact on Chinese importers, Wang said, noting that China's top three iron ore suppliers - Australia, Brazil and South Africa - have remained unchanged.

In 2021, China imported 690 million tons of iron ore from Australia, 237 million tons from Brazil and 40 million tons from South Africa. India ranked fourth with 33 million tons, according to data from Lange Steel Information Research Center.

In the first nine months of the year, Australia remained China's largest iron ore supplier with 540 million tons, following by Brazil's 160 million tons, South Africa's 29 million tons and Peru's 14 million tons. 

India dropped to the fifth-largest iron ore supplier for China, with shipments of 9.89 million tons from January to September, dropping nearly 70 percent year-on-year, according to data from Lange.

Qian Feng, director of the research department at the National Strategy Institute at Tsinghua University, told the Global Times on Sunday that as one of the major iron ore suppliers in the world, India intends to strengthen its voice in the international iron ore market by increasing exports. 

Though India was once a major iron ore supplier for China, the proportion of China's imports from India has gradually dropped since 2012, and it has remained under 5 percent in recent years. 

China's imports from India were mainly low-grade iron ore or iron ore pellets, but due to the unstable quality of low-grade ore and the high content of some microelements, many steel mills are not willing to use the imported products, experts said.

Global Times