There has been a spike in iron ore export, especially to China, and this has made the lives of Indian steel makers very difficult due to the shortage of raw material, iron ore.  

From January-April, iron ore exports from India increased by 66 percent to 22.42 million tonnes (MT), and about 90 percent of these export go to China. China being the world’s largest steel producer, imported 20.28 MT of iron ore from India in the first four months of 2021, compared to 12.24 MT in the same period of 2020. 

Economic disruptions due to COVID-19 led to a fall in iron ore production by almost 44 MT. It went from 246 MT in the previous year to 202 MT in 2020-21. However, the exports increased by 62 percent. This created an overall shortfall of iron ore supply within India. 

Indian steelmakers have demanded an iron ore export ban because the shortage has resulted in a price hike of raw material, as well as steel. Union Minister Dharmendra Pradhan a few months ago had said that a short-term ban on iron ore exports is being discussed due to domestic shortage of supply, but no steps were taken upon the ban’s execution. 

Big steelmakers with captive iron ore mines are largely unaffected by the rise in raw material cost but are getting the benefits of the resultant rise in steel prices; although the small secondary steel players have witnessed huge losses because of a steep rise in iron ore prices.