India’s iron ore imports jumped to a record 5 million tonnes in April-October, industry data showed, as a deepening shortage at home forces steelmakers to turn overseas for the raw material.
Gathering momentum in Indian imports should absorb some of the global surplus of iron ore and help stabilise prices that have been hammered by slowing demand from top buyer China.
But analysts warned that shipments to India, a country that holds vast reserves of iron ore and which was once the world’s No. 3 supplier, would not wholly make up for the drop in Chinese appetite or fuel a sharp rebound in global prices from their lowest since 2009.
India imported 5.06 million tonnes of iron ore in the first seven months of the fiscal year ending in October, according to data emailed to Reuters by industry consultancy SteelMint. The firm tracked shipments from 17 major ports.
Data collected separately by consultancy OreTeam puts April-October imports at 4.9 million tonnes.
Official government data only covers April-August, with imports totalling 2 million tonnes.
Mining curbs due to court action against illegal mining have constricted iron ore supply in India.
That, along with falling global prices, has stoked rising imports, which topped 2 million tonnes in October alone, said SteelMint, predicting the total for the full year to March could reach up to 11 million tonnes.
“We are expecting steel demand to pick up around January and that could trigger another round of strong imports of iron ore,” said Prakash Duvvuri, head of research at OreTeam.
Nearly half the April-October imports were from South Africa, with just over 1 million tonnes from Australia and Brazil, SteelMint data showed. JSW Steel Ltd, India’s No. 3 maker of the alloy, led the list of importers with 3.7 million tonnes purchased.
JSW said in September it was planning to import 10 million tonnes or more this fiscal year if the domestic shortage continued and prices stayed low.
Other importers included Tata Steel, with more looking to follow.
“We may be forced to import anytime now. Depending on prices and all, we will buy 50,000-60,000 tonnes. Based on how well we manage logistics and other things, we may then continue and increase,” said R.K. Goyal, managing director of Kalyani Steels Ltd. The company has not imported iron ore before.
Global iron ore prices have fallen below $76 a tonne, losing 44 percent of their value this year amid a deep supply glut.
Citigroup on Tuesday slashed its 2015 price forecast to $65 from $80.