Following sharp growth over the last Iranian year which ended March 20, Iran's iron ore exports are now slowing down, with volumes in the previous month ending April 20 down 6% year on year at 1.046 million mt, and about 147% lower month on month, the country's customs statistics showed.
Around 94% of Iran's iron ore exports are shipped to China, its main target market. These exports however, are unlikely to grow in coming months, a Tehran-based trader told S&P Global Platts on Monday.
"At current prices, the cost of road transportation is more than the exporting prices of some grades of iron ore and it is almost impossible for the country's northern mines to continue to export," the trader said. "Most exports are of high grades of iron ore with more than 60% Fe content and from southern reserves," he added.
Iran's government has meanwhile decided not to impose any duty on Iranian iron ore exports for six months according to Farzaneh Masoumi, a member of Iranian Producers & Exporters of Mineral Products cited by Irna, a domestic news agency.
The government had announced plans in December 2016 to impose a 10% export duty on iron ore from March 2017, but this has now been postponed to September, according to Masoumi.
Meanwhile, no iron ore pellet exports have been reported by Iranian customs.
Iranian industry sources had previously said the country's miners would start to export iron ore pellet following a sharp increase in the country's pellet making capacity, with exports expected at 100,000-150,000 mt within the first year.
But this is now unlikely, particularly due to significant domestic demand even as new direct reduced iron modules come on stream.
The country's nominal iron ore pelletizing capacity has risen 40% over the last year to 32 million mt/year currently, according to Iranian state mines and metal holding, Imidro.
Naser Taghizadeh, managing director of Golgohar, the largest Iranian miner, was cited by domestic news agencies Monday as saying that his company has no plans for pellet exports within the current Iranian year ending March 20, 2018, even if prices rise again.
The domestic steel industry is a priority for Golgohar, Taghizadeh said.
