India has raised export duties from 0 to 45 per cent for iron ore raw materials in a bid to reduce the cost of local steel production, according to India’s Ministry of Finance.
The new export duties came into effect over the weekend on 22 May with shipments likely to plummet. This means that India’s exports are likely to go down to zero from 3.14 million tonnes in April, according to Kpler.
This is not the first time that India has imposed a restriction. New Delhi has put a ban on wheat exports as prices soared over Russia’s war in Ukraine.
In hopes of providing support to China’s economy and to bolster global market sentiment, Beijing has offered more $29.7 billion (140 billion yuan) in additional tax relief yesterday. The latest initiative is aimed at businesses to help offset the impact of the Covid-19 lockdowns.
China also unveiled its second cut this year to its benchmark reference rate for mortgages, as the world’s second-largest economy monitors shrinking iron ore stockpiles while seeking to revive the housing market to support a slowing economy.
Amid this, local iron ore miners have been the beneficiary of the move with several of them hitting 52-week highs.
TerraCom (ASX:TER) posted over 560 per cent, Stanmore Resources (ASX:SMR) up 332 per cent, while iron ore pellet maker Grange Resources (ASX:GRR) surged over 350 per cent.
Sources: Bloomberg, FactSet