Sept iron ore exports fall 26% to 3 mt
India’s iron ore exports fell sharply by almost 26% to 3.08 million tonnes during September this year over the previous month as demand for steel slumped globally.
By Pramugdha Mamgain & Subhash Narayan, ET Bureau |
NEW DELHI: India���s iron ore exports fell sharply by almost 26% to 3.08 million tonnes during September this year over the previous month as demand for steel slumped globally. This has marginally increased the availability of ore in the domestic market.
Sources say the fall in exports is primarily due to decline in demand for the metal globally and not because of imposition of 15% export duty on iron ore. In fact, the steel ministry has used the contention to seek a further increase in export duty on ore to 20%.
For the period April-September 2008, iron ore exports dipped by roughly 5% to 37.93 million tonnes as against 39.79 million tonnes during the corresponding period an year ago, revealed a joint report of MMTC, Goa Mineral Ore Exporters��� Association (GMOEA) and Kudremukh Iron Ore Company (KIOCL). However, analysts do not foresee further dip in exports in the coming months.
���China being the world���s largest producer of steel has been driving the spot market so far. Post Olympics, demand for steel in China has come down drastically, which has pulled down the demand for India���s iron ore. India���s exports to
China alone stand at close to 50%,��� said a government official.
However, some analysts feel the global recession is causing all the trouble. ���So far, China has been consuming steel in large quantities in order to boost its infrastructure sector. However, recent recession in the international market has adversely impacted the credit availability.
As a result, even the Chinese government is shying away from increasing ore consumption,��� says independent steel and natural resources consultant A S Firoz.
A senior steel ministry official, however, said steel demand may pick up again next year as infrastructure sectors would continue to grow. ���This could push up prices once again. The domestic steel sector is already facing pressure on margins as steel prices reduced while costs have remained firm.
This calls for even higher duties on iron ore to improve domestic availability and cool firm prices in the market,��� the official said.
Industry estimates show Indian iron ore FOB prices have fallen below $80/tonne level currently from the peak of $145/tonne earlier this year. Ocean freight rates have also come down to $30/tonne level now from $50/tonne level 2-3 months ago.
Iron ore exports have been falling marginally since April this year. Apart from China, India exports ore to South Korea and Japan, among other countries.
Sources say the fall in exports is primarily due to decline in demand for the metal globally and not because of imposition of 15% export duty on iron ore. In fact, the steel ministry has used the contention to seek a further increase in export duty on ore to 20%.
For the period April-September 2008, iron ore exports dipped by roughly 5% to 37.93 million tonnes as against 39.79 million tonnes during the corresponding period an year ago, revealed a joint report of MMTC, Goa Mineral Ore Exporters��� Association (GMOEA) and Kudremukh Iron Ore Company (KIOCL). However, analysts do not foresee further dip in exports in the coming months.
���China being the world���s largest producer of steel has been driving the spot market so far. Post Olympics, demand for steel in China has come down drastically, which has pulled down the demand for India���s iron ore. India���s exports to
China alone stand at close to 50%,��� said a government official.
However, some analysts feel the global recession is causing all the trouble. ���So far, China has been consuming steel in large quantities in order to boost its infrastructure sector. However, recent recession in the international market has adversely impacted the credit availability.
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As a result, even the Chinese government is shying away from increasing ore consumption,��� says independent steel and natural resources consultant A S Firoz.
A senior steel ministry official, however, said steel demand may pick up again next year as infrastructure sectors would continue to grow. ���This could push up prices once again. The domestic steel sector is already facing pressure on margins as steel prices reduced while costs have remained firm.
This calls for even higher duties on iron ore to improve domestic availability and cool firm prices in the market,��� the official said.
Industry estimates show Indian iron ore FOB prices have fallen below $80/tonne level currently from the peak of $145/tonne earlier this year. Ocean freight rates have also come down to $30/tonne level now from $50/tonne level 2-3 months ago.
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Iron ore exports have been falling marginally since April this year. Apart from China, India exports ore to South Korea and Japan, among other countries.
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