In the first half of 2025, India’s iron ore trade patterns underwent a significant shift, driven by robust domestic steel demand and a change in the country’s steel production methods. This shift has led to a surge in imports and a sharp decline in exports, with implications for global shipping.
Trade Flow Reversal
India’s iron ore imports increased by over 80% year-on-year in the first half of 2025. This surge was fueled by strong domestic steel production, which grew over 9% in the same period, the fastest among major producers, solidifying India’s position as the world’s second-largest crude steel producer. At the same time, iron ore exports plummeted by over 45% as more of the domestically mined ore was consumed by Indian steelmakers.
Historically, India exported a large amount of low-grade iron ore “fines” while primarily consuming “lumps” domestically. This was because fines require an additional processing step (pelletization or sintering) before they can be used in traditional blast furnaces. However, with more Indian steel mills now equipped to process fines, domestic consumption of this type of ore has risen, reducing the need for exports. Simultaneously, the country’s rapidly expanding steel sector has increased its demand for high-grade lumps, which are now being met through imports, supported by favorable global prices.
Impact on Shipping
This reversal in trade patterns is reshaping shipping demand. The surge in iron ore imports from distant sources like Australia and Brazil is creating a higher demand for larger vessels. The balance has shifted toward Capesize vessels, which are now increasingly preferred over the previously common Handysizes and Supramaxes for carrying these larger parcels. This change in vessel preference is supporting the employment of Capesize ships in the global bulk carrier market.
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Source: Drewry
