Iron ore export volumes from Goa have increased significantly in last two months. According to customs data maintained with SteelMint, iron ore exports from Goa’s Mormugao port was recorded at 0.88 MnT in Dec’17 as against 0.38 MnT in Nov’17.
Further the following month, Goa iron ore exports were recorded at 0.83 MnT in Jan’18. As per market sources report to SteelMint, exporters have turned active and the export volumes are likely to increase further this month, i.e. in Feb’18.
Vedanta – largest iron ore exporter from Goa, exported 0.45 MnT in Jan’18.
So far in FY18 (till Jan’18), Vedanta exported 2.89 MnT iron ore followed by Fomento Resources (1.56 MnT) and VM Salgaonkar at 0.82 MnT.
As per conversation with trade sources, SteelMint learned that apart from export of low grade ore, increase in volume of export of ore having iron content more than Fe 58% has also moved up leading to increase in overall export volumes.
Trade sources mentioned despite being of high grade, exporters are exporting the ore as per their interpretation with the customs circular issued in 2012, without paying 30% export duty. This is with reference to the customs circular issued on Feb, 2012 which was related to Adoption of uniform Customs Procedure for calculating the contents of Iron Ore.
The circular states that “In light of the observation by the Apex Court that export duty is chargeable according to Fe contents, and to maintain uniformity all over the custom houses, it is clarified that for the purpose of charging of export duty the assessment of Iron ore for determination of Fe contents shall be made on Wet Metric Ton (WMT) basis which in other words mean deducting the weight of impurities (inclusive of moisture) out of the total weight/Gross Weight to arrive at Net Fe contents.”
In talk with market sources, SteelMint learned that Indian iron ore fines of Goa origin is trading at around a discount of 20% against the index because of high alumina content. Thus for instance, benchmark iron ore fines Fe 62% index is currently assessed at around USD 74/MT, CFR China then reference price for Indian iron ore Fe 60% fines will come to around USD 60/MT, CFR China.
Goa iron ore fines ex-mines realization
| Particular | Prices | |
| In INR | In USD | |
| CNF China, Goa iron ore Fe 60% fines | 3,842 | 60 |
| Freight from India (west coast) to China | 781 | 12.2 |
| FoB India (Fe 60%) fines | 3,061 | 47.8 |
| Moisture @ 4% | 122 | 1.9 |
| Goa Iron ore Permanant Fund@ 10% | 294.5 | 4.6 |
| Royalty | 198 | 3 |
| DMF @ 30% of Royalty, NMET | 63.9 | 0.9 |
| Road Freight | 250 | 3.9 |
| Local Handling | 250 | 3.9 |
| Ex-mines realisation | 1,883 | 29.5 |
Considering 1 USD = 64.04 INR
Source: SteelMint Research
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