Top iron ore miner Vale SA is aiming to boost its business in India by ramping up shipments to the country and seeking to trade its ore globally, tapping into one of the world’s fastest growing steel markets.
“India could be an opportunity not just for sales, but also to source iron ore, blend it and trade it — finding better markets for their product,” commercial executive vice president Rogerio Nogueira said in an interview.
The world’s most populous nation has been a bright spot in the global seaborne iron ore market in recent years, with local mills ramping up steel production to cater to its infrastructure build-out and rising consumer demand. While its industry remains much smaller in scale than China’s, output in the world’s No. 1 steelmaker has plateaued. That contrast means India is a potential source of growth for Vale, as well as rivals BHP Group Ltd. and and Rio Tinto Group.
While Vale sees China’s steel output declining slightly, India’s capacity should more than triple to 500 million tons by 2050, according to Nogueira. “India won’t be another China, but Vale will have a higher share,” he said.
That optimistic outlook broadly tallies with near-term projections from Australia’s government. India’s steel output is forecast to hit 184 millions tons in 2027, up from 165 million last year, the Department of Industry, Science and Resources said in a recent quarterly outlook. Over the same period, China’s production was set to slip to 959 million tons from 954 million tons.
The South Asian nation is also seen as one of the fastest growing markets for iron ore imports. Inbound shipments were expected to jump from just 16 million tons in 2025 to 30 million tons by 2027, the Australian projections show. And Vale sees India’s domestic steel production growing faster than iron ore, due to obstacles such as licensing, Nogueira said.
The Brazilian miner aims to grow its presence in India over time, with sales expected to expand by 50% to about 15 million tons this year, according to Nogueira. What’s more, Brazilian ore has a chemical composition that complements India’s, he said, potentially aiding the firm’s expertise in the distribution supply chain.
Vale operates two distribution centers, in Malaysia and Oman, and has long-term agreements with 22 ports in China, which also serve as hubs. In February, it signed a memorandum of understanding to jointly develop a blending facility with India’s Adani Ports and state-run miner NMDC Ltd. Other similar partnerships were being considered, Nogueira said.
India’s domestic iron ore resources are concentrated in the eastern part of the country, a region that has very high coastal shipping costs. Supplying the west coast — which holds the bulk of the nation’s population, as well as Vale’s main steel-industry clients — is on the radar, he said.
Nogueira declined to comment on the potential impact of the Middle East conflict on the company. Analysts’ notes following a round-table discussion with chief executive officer Gustavo Pimenta earlier this month highlighted that while freight rates are impacted, Vale hedges about 75% of its bunker fuel. (By Mariana Durao)
