According to the rating agency CARE data, asthe fourth largest producer of iron ore in the world, India's iron ore importsin the first three quarters of fiscal year 2019 (2018.04-2019.03) were 11.75million tons, an increase of 157% year-on-year. The main reason for theincrease in Indian imports is the high cost of domestic procurement logistics,coupled with lower import tariffs.

The main importers of iron ore imported fromIndia are South Africa (19%), Brazil (15%) and Bahrain (5%). In July 2018, ironore imports reached 1.93 million tons, the highest level in a single month inthe past five years. The surge in iron ore imports is mainly attributable tothe price difference between iron ore from different origins. Although thelogistics costs in coastal areas have risen, in the face of high levels ofdomestic mineral prices, Indian domestic steel mills have changed theirprocurement methods and are more inclined to import raw materials.

In addition, lower import tariffs (2.5%) havealso stimulated Indian iron ore imports. However, since August 2018, due to thestrength of the US dollar, the price difference between the cost of iron orelanding and the domestic domestic mine price has narrowed, and the importvolume is gradually decreasing.