Asia’s third-largest economy has increased export duties on iron ore and steel intermediates, with new tariffs on iron ores and concentrates increased from 30% to 50% and duties on pellets increased from zero to 45%. The government has also removed import duties on coking coal and coke.
India is a major non-traditional supplier of iron ore to China, accounting for almost 3% of China’s total imports in 2021.
However, China’s purchases from the country fell sharply in the first four months of this year due to increased demand from India and falling iron ore prices.
“The impact of iron ore export tariff changes in India is not that big,” said Cheng Peng, analyst at SinoSteel Futures.
“The key issue is on the supply side, and that would have a bigger impact on market expectations (that India could offset the disruption caused by the Ukraine-Russia conflict).”
The most traded iron ore futures on the Dalian Commodity Exchange, for delivery in September, closed up 4.4% at 864 yuan ($129.65) a ton, after rising by 6.9% to 884 yuan, their highest level on May 6 in early trading.
Singapore iron ore futures, for June delivery, edged up 0.6% to $135 a tonne.
Other steel ingredients on the Dalian Stock Exchange fell, with coking coal falling 2.5% to 2,567 yuan a ton and coke prices falling from morning gains to end down 0.8 % at 3,370 yuan per ton.
Steel rebar on the Shanghai Futures Exchange, for October delivery, fell 0.2% to 4,604 yuan per ton and hot-rolled coil was down 0.3% at 4,731 yuan per ton. .
Shanghai stainless steel futures fell 2.2% to 18,535 yuan a ton. ($1 = 6.6639 Chinese yuan renminbi) (Reporting by Min Zhang in Beijing and Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu)