New freight rates for export of iron ore fails to draw attention of exporters. However, an exporter has purchased low grade fines in Odisha and Goa.
Lower iron ore prices in seaborne market and export tax from India makes export unviable. It may be noted that government revised the Distance Based Charges (DBC) on iron ore exports w.e.f 08 Sept’15, which is lower by at least INR 1,100/MT (USD 16/MT). Govt also reduced export tax on low grade (less than 58%) iron ore from 30% to 10% w.e.f 01 Jun’15.
Approximate Cost of Exports:
|
Particular |
Prices | |
| In INR |
In USD |
|
| Cost of Material (58/57 Fe%) | 600 | 9.1 |
| Local Handling | 200 | 3 |
| Railway Freight | 1,050 | 15.9 |
| Port Handling | 300 | 4.5 |
| Moisture @ 4% | 85 | 1.3 |
| Export Duty @10% of FOB | 225 | 3.5 |
| Misc | 80 | 1.2 |
| Total Cost of Exports (FOB) | 2,540 | 38.5 |
| Current FOB Price for 57% Fe Iron Ore | 2,310 | 35 |
| Net Profit/(Loss) | (230) | (3.5) |
Note:
– Prices on ex-Mines basis including royalty
– Railway freight from Odisha main loading point to Dhamra Port
– 1 USD = INR 66
Sources say an exporter has bought 0.2 MnT iron ore fines
Despite iron ore exports being unviable owing to lower iron ore prices in global market the exporter moved 40,000 MT fines (10 rakes iron ore fines, Fe 58-59) from Juruli siding to Dhamra Port as per the recent railway program in a week however further procurement is cautious.
Approx price of deal is INR 850/MT loaded to wagon. The exporter is also looking forward to book more low grade cargoes (Fe 55-57) for export purpose.
Low grade iron ore exports from Goa are likely to pick up post fresh mining resumption in Oct’15. The exporter has bought approx 0.11 MnT fines from Goa in the present auction.
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