India’s iron ore exports fell in February to about 889,882 tonnes, a decline of 16.5 per cent year- on- year. Pellet export shipments were completely absent in February and there was a notable drop in buying interest from China, which has built up heavy inventory. During the period between April 2013 and February 2014, India exported 14.01 million tonnes compared to 17.36 million tonnes in the year- ago period, showing a decline of 19.3 per cent. Odisha alone exported about eight million tonnes during the first 10 months of the current financial year. By the end of this month, India’s exports could touch 15- 15.2 million tonnes. In FY13, India had exported 18 million tonnes valued at $ 1.8 billion. Following the introduction of a five per cent export duty on pellets, export shipments vanished from India in February, except for one cargo of Jindals, which seemed to make its way to its own plant in Oman. Although there were four offers in the market for Indian pellets, no deal concluded, leaving the cargoes unsold. Currently, export duty on iron ore is 30 per cent. Recently, the government had imposed a five per cent duty on pellets. “The major reasons for the drop in exports were China’s low buying interest in the backdrop of increasing port inventories.
A combination of tight credit conditions, subdued steel demand and diminishing concerns regarding security of supply allowed the port stocks to breach the 108- million tonne mark, putting enough pressure on the iron ore prices. The lower prices were not seemingly in the interest area of many suppliers who preferred to stay away from the market,” said Prakash Duvvuri, head of research, Ore Team Research. Iron ore prices in China have fallen, owing to the slow growth in Chinese steel demand and falling steel prices. The real estate sector demand has been very slow in China. As a result, prices of 63.5 to 63 per cent Fe grade have declined to $ 117 a tonne (cost and freight) in China and 58 per cent Fe grade to $ 100 per tonne. The prices are likely to fall further, he said. The country’s all- time high exports came in the year 200910, when exports hit 117 million tonnes valued at about $ 10 billion. In FY13, Goa alone had contributed about 10 million tonnes of iron ore to the total exports. In the coming days, the falling iron ore prices and limited storage space are likely to increase the pressure on traders to sell their iron ore but, at the same time, steel mills may be waiting for the market to hit rock bottom before buying. The mills know the port stocks are quite high; hence, they wouldn’t mind waiting for a bit more, Ore Team Research’s Duvvuri said. The country’s iron ore exports witnessed a 27.56 per cent slump at 12.57 million tonnes (MT) during the April-February period of the current fiscal due to continuation of the export duty, mineral industries body FIMI said. India, once the third largest exporter of iron ore, had exported 17.35 MT of the mineral in the corresponding period of the last fiscal, data released by Federation of Indian Mineral Industries (FIMI) showed. ‘This is a disturbing trend as exports have declined continuously in last few years due to imposition of export duty. We will continue to persuade the government to withdraw the export duty on iron ore as well as on iron ore pellets,’ FIMI Secretary General R K Sharma said. He added that this fiscal’s iron ore exports are expected to come down by over 20 per cent to about 13.5-14 MT from 18.37 MT in 2012-13. Indian iron ore exports have been hurt badly in last few years due to mining bans in Goa and Karnataka, leading to a drastic fall in domestic production. Besides, an increase in export duty to 30 per cent on both types of iron ore, lumps and fines, in December 2012, also impacted the sector. However, China continues to be the biggest export market for Indian iron ore, though the quantity has declined by over 31 per cent to 10.44 MT in April-February. Japan is the second biggest market.
Presently, low grade iron ore (or fine) are being exported from Odisha, Jharkhand, Rajasthan and Madhya Pradesh as mining is still banned in Goa, while export of the mineral is not permitted from Karnataka at present. In last two months, Goa government auctioned over a million tonne of iron ore, which was already mined before the imposition of ban. Quality of the auctioned ore of Goa is of low grade and most the auctioned material is expected to be exported in the near future. This may lead to slight increase in iron ore exports as well. The industry is estimating that India’s total iron ore production in the present fiscal will be around 140 MT, almost the same as last year.
A combination of tight credit conditions, subdued steel demand and diminishing concerns regarding security of supply allowed the port stocks to breach the 108- million tonne mark, putting enough pressure on the iron ore prices. The lower prices were not seemingly in the interest area of many suppliers who preferred to stay away from the market,” said Prakash Duvvuri, head of research, Ore Team Research. Iron ore prices in China have fallen, owing to the slow growth in Chinese steel demand and falling steel prices. The real estate sector demand has been very slow in China. As a result, prices of 63.5 to 63 per cent Fe grade have declined to $ 117 a tonne (cost and freight) in China and 58 per cent Fe grade to $ 100 per tonne. The prices are likely to fall further, he said. The country’s all- time high exports came in the year 200910, when exports hit 117 million tonnes valued at about $ 10 billion. In FY13, Goa alone had contributed about 10 million tonnes of iron ore to the total exports. In the coming days, the falling iron ore prices and limited storage space are likely to increase the pressure on traders to sell their iron ore but, at the same time, steel mills may be waiting for the market to hit rock bottom before buying. The mills know the port stocks are quite high; hence, they wouldn’t mind waiting for a bit more, Ore Team Research’s Duvvuri said. The country’s iron ore exports witnessed a 27.56 per cent slump at 12.57 million tonnes (MT) during the April-February period of the current fiscal due to continuation of the export duty, mineral industries body FIMI said. India, once the third largest exporter of iron ore, had exported 17.35 MT of the mineral in the corresponding period of the last fiscal, data released by Federation of Indian Mineral Industries (FIMI) showed. ‘This is a disturbing trend as exports have declined continuously in last few years due to imposition of export duty. We will continue to persuade the government to withdraw the export duty on iron ore as well as on iron ore pellets,’ FIMI Secretary General R K Sharma said. He added that this fiscal’s iron ore exports are expected to come down by over 20 per cent to about 13.5-14 MT from 18.37 MT in 2012-13. Indian iron ore exports have been hurt badly in last few years due to mining bans in Goa and Karnataka, leading to a drastic fall in domestic production. Besides, an increase in export duty to 30 per cent on both types of iron ore, lumps and fines, in December 2012, also impacted the sector. However, China continues to be the biggest export market for Indian iron ore, though the quantity has declined by over 31 per cent to 10.44 MT in April-February. Japan is the second biggest market.
Presently, low grade iron ore (or fine) are being exported from Odisha, Jharkhand, Rajasthan and Madhya Pradesh as mining is still banned in Goa, while export of the mineral is not permitted from Karnataka at present. In last two months, Goa government auctioned over a million tonne of iron ore, which was already mined before the imposition of ban. Quality of the auctioned ore of Goa is of low grade and most the auctioned material is expected to be exported in the near future. This may lead to slight increase in iron ore exports as well. The industry is estimating that India’s total iron ore production in the present fiscal will be around 140 MT, almost the same as last year.
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