Mild, for the time being, changes are being recorded in India’s iron ore imports, something that may change soon, altering the data for bulk carriers.
In the first ten months of the year, these flows increased by approximately 9.5%, to 31.6 million tons, according to ship tracking data. In fact, SSY’s estimates show that, by 2026, the country could import up to 50 million tons of iron ore, making India a potential net importer of iron ore (imports greater than exports). This rapid increase is not solely due to increased demand, but reflects a deeper strategic transition.
At the center of this increase is JSW Steel, which holds an excessively large share of India’s imports. The reason is simple: as JSW expands its production capacity in electric arc furnaces (EAF) and continues to supply customers in Western markets, it needs high-quality iron ore to reduce emissions. The company is adding 1.5-2 million tons at its Vijayanagar plant and an additional 5 million tons at Dolvi, according to Moody’s. However, much of India’s domestic iron ore is of low quality and its upgrading is expensive, a fact that is pushing JSW to source increasingly more high-quality cargoes from abroad.
In its analysis, SSY points out that this change in India’s import profile is resulting in a significant number of Vale’s cargoes being directed there versus China. In fact, from January to October, 92% of the increase in India’s iron ore imports (+6.0 million tons) came from Vale shipments from Brazil and Oman.
India’s port infrastructure further supports this trend. JSW can receive its Vale cargoes at the deep-water ports of Jaigarh and Krishnapatnam, where Capesizes can dock comfortably and optimize economies of scale. Mirroring its strategy in China, Vale appears to be trading double cargoes from Tubarão and PDM to both ports, reducing the transport cost per ton and allowing JSW to secure the precise ore quality it needs at competitive prices.
Regarding the implications for the freight market, there are two scenarios. In the case that Vale’s cargoes from Brazil are complementary, meaning they supplement and do not replace existing shipments from Oman, the trade will create strong positive ton-miles and significantly benefit bulk carriers, explains SSY. If, however, they simply replace pellet cargoes, the rise in ton-miles will be limited.
