India: Iron ore and pellet exports jump in May as stronger export economics, Chinese restocking drive shipments

• • Improving export realisations encourage miners to raise overseas sales

• • Healthy Chinese pre-Labor Day restocking demand sustains buying interest for Indian cargoes

• • Supportive benchmark prices, narrowing discounts for low-grade fines improve export competitiveness

Morning Brief: India’s iron ore and pellet exports increased sharply by 31.8% m-o-m to around 3.02 mnt in May’26, up 37.3% y-o-y from 2.2 mnt a year earlier, supported by stronger export economics, active Chinese restocking and improved market conditions for low-grade Indian material.

Iron ore exports rose to 2.55 mnt in May from 2.14 mnt in April, while pellet exports surged to 0.48 mnt from 0.15 mnt over the same period. The increase reflected aggressive marketing by Indian miners ahead of China’s Labor Day holiday, with exporters rushing to conclude pending negotiations and secure May shipments.

Export economics turn favourable:

A key driver behind the increase in exports was the improvement in relative export realisations. Export prices for Indian iron ore fines strengthened steadily, while domestic market returns softened, reversing the premium that domestic sales had previously enjoyed.

Export realisations increased from around INR 3,650/t in March to INR 3,800/t in May, while domestic realisations declined from INR 3,900/t to around INR 3,600/t over the same period. After domestic sales offered a premium of around INR 350/t in March, the gap narrowed in April before export realisations moved ahead of domestic prices in May, encouraging miners and traders to prioritise overseas shipments.

A weaker rupee further improved export returns. The USD/INR rate strengthened from 92.8 in March to 95.6 in May, enhancing exporters’ realisations from dollar-denominated sales.

Chinese restocking supports demand:

Demand from China remained healthy as steelmakers continued replenishing inventories around the Labor Day holiday period. Indian exporters aggressively offered single-mine cargoes ahead of the holiday window, while buyers sought additional material to support mill operations.

Production among Chinese blast furnace steelmakers remained firm, supported by improved profitability. According to Mysteel, the average blast furnace capacity utilisation rate among 247 surveyed mills increased to 89.7% during 8-14 May, while hot metal production edged up to 2.39 million tonnes/day. The average operational rate also rose to 83.5%, reflecting sustained steel output and stable raw material consumption.

At the same time, inventories at China’s 34 major ports continued to decline, falling from 165 mnt in March to 162 mnt in April and further to 158 mnt in May. The drawdown in port stocks underscored the need for parallel replenishment bookings, supporting continued import demand.

Supportive pricing environment:

Global benchmark prices also lent support to exports. Strength in Fe 61% fines prices improved seller sentiment and narrowed discounts for Indian low-grade fines to around $18-20/t, improving netbacks for exporters.

In addition, fresh low-grade material offered by Indian miners ahead of FY27 environmental clearance renewals increased cargo availability and supported multiple export transactions during the month.

India’s Fe 57% fines export index increased by $1.5/t to $63/t FOB India in April from $61.5/t in March amid stronger demand and active export offers, before easing marginally to $62/t FOB India in May. Despite the slight correction, export opportunities remained attractive relative to the domestic market.

Company-wise exports:

Rungta Mines remained the largest exporter during May, shipping around 1.25 mnt of iron ore from Odisha. OCL Iron & Steel exported approximately 0.41 mnt, with Odisha-based miners accounting for a significant share of the month’s export growth.

Country-wise exports:

China remained the largest destination for Indian iron ore and pellet shipments, with imports increasing to 2.2 mnt in May from 2.11 mnt in April. Meanwhile, exports to Malaysia more than doubled, rising to 0.36 mnt from 0.13 mnt over the same period.

The increase in shipments to both destinations reflected healthy regional demand and active replenishment buying, supported by firm Chinese steel production and declining port inventories.

Outlook:

The sharp increase in May exports highlights the importance of relative export economics in directing Indian iron ore flows. The combination of stronger overseas realisations, healthy Chinese steel production, lower port inventories and supportive benchmark prices encouraged exporters to accelerate shipments during the month. Going forward, the balance between domestic and export realisations, alongside trends in Chinese steel output and inventory replenishment, will remain the key determinants of export activity.