Odisha based miners have seen active in moving low grade iron ore fines to east coastal region. Whereas exporters from other regions are still away from market due to low viability.
In addition, on an average, there are 3-4 rakes loaded from Odisha region to either Haldia, Paradip or Dhamra Port on daily basis. In June’16 (till 28 June’16), total 69 rakes had been loaded for Dhamra as well as Paradip Port. Rungta Mines loaded around 33 rakes for Dhamra Port and 19 rakes for Paradip Port till 28 June’16.
As per SteelMint’s analysis, considering last export shipment from Odisha which was concluded at USD 32/MT FoB India, ex-mines realisation of iron ore fines (Fe 57-58%) to Odisha miners will approximately stand at INR 600-650/MT .
“Since in domestic market there is no buyer of low grade fines, we are exporting. Commercial margin is negligible” said an Odisha-based miner.
In FY17, approximately 4.9 MnT low grade iron ore had already shipped. Perhaps, SteelMint estimates around 10-12 MnT iron ore exports from India during this period. In addition, Odisha-based miners have planned to load approximate 2-3 vessels in July’16.
Cost dynamics of low grade iron ore exports from Odisha
| Particular | Prices | |
| In INR | In USD | |
| FoB India (Fe 57%) fines | 2166 | 32.0 |
| Hedging cost | 135 | 2.0 |
| Moisture@4% | 86 | 1.3 |
| Port Handling Charges | 300 | 4.4 |
| Freight from Mines to Port | 800 | 11.8 |
| Local Transport charges (Mines to railway siding) | 300 | 4.4 |
| Royalty@15% | 89 | 1.3 |
| DMF@30% of Royalty +NMET | 28 | 0.4 |
| Miscellaneous | 50 | 0.7 |
| Ex-mines realization | 648 | 9.7 |
Exchange rate: 1 USD=67.7 INR
Source: SteelMint Research
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