India's iron ore imports to trend higher, but it's no China
Boosting demand: An employee works at a steel production line of the Jindal Stainless facility in Hisar, Haryana, India. The country's steel-making capacity is currently about 200 million tonnes per annum. — Reuters
THE rise of India's steel sector is touted as a boost for iron ore miners seeking to find new markets as China's output eases, but the reality is likely to fall short of the hype.
India's steel-making capacity is currently about 200 million tonnes per annum and the South Asian nation has ambitious plans to reach 300 million by 2030.
Working on the assumption that these plans come close to being realised, how does that alter the dynamics in the global seaborne iron ore market?
In order to get to an answer, it's important to work out how much of the demand for iron ore from the new steel mills can be met by India's own mines.
India is the fourth-largest iron ore miner and its production hit a record 289 million tonnes in the fiscal year from April 2024 to March 2025, according to preliminary government data.
This was up from the previous fiscal year's 277 million tonnes, but is also well short of what would be required to supply a 300 million tonnes per annum steel-making sector.
Depending on the grade of iron ore used, it takes about 1.6 tonnes to make one tonne of steel using the blast furnace and basic oxygen furnace process, the most common method in both India and top steel producer China.
Is it possible that India's domestic iron ore output could rise to around 460 million tonnes by 2030, and if it could, is it also possible that the infrastructure required to transport ore to steel mills can be put in place?
Vedanta Group chairman Anil Agarwal told the Business Standard last month that India has the potential to overtake China and Brazil to become the second-largest iron ore miner after Australia.
Vedanta owns Sesa Goa Iron Ore, one of India's major producers, and while Agarwal is correct in pointing to India's large reserves, it's unlikely that such a large increase in iron ore output in a relatively short period of time is possible.
The Indian Steel Association expects that there will be a shortage of iron ore of more than 100 million tonnes in coming years, meaning imports will have to increase.
India is currently a net exporter of iron ore, usually shipping lower-grade ores to China while importing higher-grade material to blend with domestic ore.
India's exports for the first five months of 2025 were 13.67 million tonnes, of which 11.11 million went to China, according to data compiled by commodity analysts Kpler.
Exports have been trending lower as more ore is used by domestic steel plants, with the monthly average of 2.73 million tonnes for the first five months of 2025 down from the average of 3.13 million for 2024 and 3.7 million for 2023.
Imports have also been trending higher, with arrivals of 4.57 million tonnes in the first five months of 2025, according to Kpler. This puts India on track to more than double imports this year from the 6.72 million tonnes in 2024 and the 6.67 million in 2023.
But even if imports do rise to around 10 million tonnes this year, it's a long way to get to 100 million tonnes by 2030.
Much will depend on how quickly India builds up steel capacity and how domestic iron ore miners respond.
India has about 20 million tonnes of steel capacity currently under construction and a further 155 million planned, according to data compiled by the Global Energy Monitor.
The under-construction plants will likely boost demand for iron ore imports, but the volumes are likely to be modest, at least for this year and next.
What is likely is a continuation of current trends, with India's exports of low-grade iron ore trending lower and its imports of higher-grade ore moving higher over time. — Reuters
Clyde Russell is a columnist for Reuters. The views expressed here are the writer's own.
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