23 May 2022 – India has imposed new export taxes on iron ore, stainless steel and steel on 21 May 2022, some of them of up to 50%. According to the Indian government, to keep important raw materials in the country. The International Energy Agency (IEA) pointed out in a report last week that commodity prices are rising at a record pace – especially for metals and clean energy minerals.
India imposes up to 50% export tax on iron ore and steel products
On Saturday, the Indian government announced that it will impose export taxes of up to 50% on iron ore and 15% on steel and stainless steel from 22 May 2022.
India wants to keep raw materials in the country
India, which wants to expand its capacities from 100 million tonnes of crude steel to 300 million tonnes of crude steel per year in the next few years, wants to keep important raw materials in the country. Currently, most of India’s exported iron ore goes to China.
Export taxes on steel and stainless steel products
Stainless steel bars, rods, angles and profiles, especially flat-rolled stainless steel products, are affected by the export taxes. But also conventional alloyed and non-alloyed steel products. Almost all affected products are also subject to 15% export taxes since 22 May.
IEA: Critical commodity prices rise at record pace
In a new report, the International Energy Agency (IEA) has also recognised that prices for critical minerals in clean energy technology are rising at record speed. This poses a potential threat to the transition to a net-zero society.
Prices have more than doubled in some cases in 2021
Prices of many minerals and metals essential to clean energy technologies have surged recently due to a combination of rising demand, disrupted supply chains and concerns about supply shortages. “Lithium and cobalt prices have more than doubled in 2021, and copper, nickel and aluminium prices have all increased by around 25% to 40%,” notes IEA analyst Tae-Yoon Kim.
Chart: Scale of price increase for selected energy transition minerals and metals
- Price increase (January 2021-March 2022 – light blue)
- Largest annual increase in the 2010s (dark blue)
- Average annual increase in the 2010s (green)
Critical minerals and metals price trends continue in 2022
These price trends have continued in 2022, according to the IEA. The price of lithium has increased two and a half times since the beginning of the year. The prices of nickel and aluminium – for which Russia is a major supplier – have also continued to rise, partly due to Russia’s invasion of Ukraine. For most minerals and metals critical to the clean energy transition, price increases since 2021 far exceed the largest annual increases of the 2010s.
Diversification in procurement as a solution
It is important, not only according to the IEA, that diversified solutions are used in the procurement of raw materials. In future, no one can rely on a single source alone for raw material procurement. A failure of the source due to a shortage of raw materials (magnesium, China), global crises (example Russia-Ukraine) or market protection measures and export restrictions – most recent example India (see above) or Indonesia (export ban on nickel, bauxite and tin) – can quickly lead to major challenges and problems in procurement.
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