India’s iron ore imports are expected to hit 3 years high in the month of Jan’18 as limited domestic supply pushed steelmakers to buy more of the raw material overseas, according to port data maintained by SteelMint.
Indian imports are likely to be above 1.77 MnT in Jan’18. This volume was last seen in Feb’15 when some mines in the states of Odisha and Jharkhand were ordered to close after the expiry of licenses. According to customs data maintained with SteelMint, India has already imported a total quantity of 1.15 MnT iron ore so far in Jan’18.
According to the data 5 vessels are lined up at different Indian ports (till 22nd Jan) carrying a total tonnage of 0.80 MnT. India imported 5.5 MnT iron ore in 2017, with a monthly average of 0.46 MnT.
A similar situation has occurred now when Odisha government suspended operations of five iron ore mines after leaseholders failed to meet a deadline on 31 December, fixed by the Supreme Court, for paying penalties for illegally extracting ore between 2000 and 2011.
Odisha accounted for more than half of India’s total 192 MnT of iron ore produced in the fiscal year to March 2017.According to the data maintained with SteelMint between April to November 2017, the state was generated 63.77 MnT of iron ore, including 13 MnT produced by the five mines that have now been shut down.
Landed cost of iron ore fines from NMDC (C.G.) vs imported to a west coast based importer-:
| Particular | NMDC (Chhattisgarh) | Imported |
|
Iron Ore Price- Fines
|
2,760 | $75 |
| Currency | INR | USD |
| Grade | 64% | 62% |
| (+) Royalty, DMF, NMET, Cess, Permit |
550 | NA |
| GST @ 5% | 166 | NA |
| Condition | WMT | DMT |
| Delivery | Loaded to Wagons | CIF India |
| (+) Railway Freight to Load port (Domestic) |
1,150 | NA |
| (+) Port Handling Charges at load port |
350 | NA |
| (+) Vessel Freight (Coastal) | 400 | NA |
| (+) Custom Duty (Imported Ore) @ 2.5% |
NA | $1.90 |
| (+) Port Charges at Unload Port |
200 | $3.10 |
| (+) WMT to DMT (Moisture @ 4%) | 180 | 0 |
| Delivery time |
15-20 days | 25-35 days |
| Net Landed Cost | 5,756 | $80.00 |
| In INR (1 USD = INR 63.9) | ||
| In USD | $90 | $80 |
| Adjustment for Grade difference considering $2.5 for 1% Fe |
NA | $5 |
| Total cost | $90 | $85 |
1 USD = 63.9 INR
Source: SteelMint Research
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