Iron ore exports to China dip

KOLKATA: Trading in iron ore has been impacted by the prevailing credit crisis and a cut-back in production by major Chinese steel companies. India���s exports of iron ore ��� nearly 50% of which is supplied to China ��� have also declined sharply, with 30 million tonnes of iron ore bound for China reportedly stuck in various ports of the country.

���Out of a cumulative daily offtake of 50 rakes, nearly 12 rakes were used, on an average, for transporting iron ore bound for these ports. But there has been a drastic reduction in the past few weeks,��� a source in the Railways told ET. A significant amount of iron ore is exported out of the Paradeep, Kolkata and Vizag ports.

South Eastern Railway, which accounts for the bulk of the iron ore movement in the country, has witnessed a steep fall in indent for rakes bound for ports. In September alone, the ore exports from India dropped by almost 26% to a little over 3 million tonnes.

According to officials of the ministry of mines, total exports may decline to around 80 million tonnes this year. India exported more than 100 million tonnes of iron ore last year, consisting mainly of low grade ore and fines, and more than half of this went to China.

Spot sales have gone down dramatically in the past few weeks. Since China is also a big driver of prices in the global spot market, prices of iron ore fines have corrected steeply. From a high of $150/tonne, spot prices have gone down to $70-80/tonnes.