JPM-India Iron Ore Prices climbing higher, but imports remain strong-20251015

India turned into a net importer of iron ore in Jul-Aug 2025 for the first time in many years (FY15 saw higher imports). India’s net exports have sharply declined YoY to 3.5MT in 1HFY26 (-70% vs. 11MT in 1HFY25). We believe this was largely driven by a narrowing of the discount between domestic and international pellet prices which is incentivizing seaborne purchases via the Middle East. We have been highlighting that Indian iron ore imports have been surging led by soft production growth, opportunistic purchases of high-quality grades and strategic shift (links to report here, here). While imports fell MoM in September due to the surge in international prices, the discount of domestic pellet prices to international is still lower than the historical average. Thus, we believe FY26 imports (JPMe 10MT) could be the highest level since at least FY19. Soft domestic production growth was the likely reason for the Indian government contemplating an imposition of a 30% export duty on low grade iron ore for securing raw material security. However, news reports suggest the government is holding off for now due to requests from domestic miners. We see an upward bias for iron ore imports in India but will keenly monitor production ramp up from NMDC, OMC and Lloyds Metals. Within our metals coverage, our top pick is TATA Steel. We remain UW on NMDC.

•India’s net exports declined to 3.5MT in 1HFY26 vs. 11MT in 1HFY25.Imports in 1HFY26 rose 272% to 5.2MT while exports fell 30% to 8.7MT.Domestic iron ore production was 113MT (Apr-Aug) vs. 116MT in FY25TD.Production print from NMDC for September was strong (+23% YoY) & Lloyds Metal also posted 77% YoY growth to 3.4MT in Jul-Sep. 2HFY26 ramp up will be key to monitor.