Recent decline in global iron ore prices and high discounts on low-grade Indian iron ore fines kept Indian exporters away from participating in Goa 19th e-auction.
Directorate of Mines & Geology (Govt. of Goa) conducted 19th iron ore e-auction on 21 Apr’17. Total offered quantity was 2.16 MnT. Out of the total quantity auctioned, 1.77 MnT was ROM, 0.24 MnT was fines, 0.15 MnT was lump.
Grade of ROM offered was from Fe 40.6-59%. Fines offered were in range from Fe 44.6-63%. Grade of lump offered in the e-auction varied from Fe 46-62%. Base prices remain unchanged at INR 500/MT for all material type across all grades.
As per market sources report to SteelMint, only 0.186 MnT iron ore was sold. Thus only 9% of the material offered was sold, and rest major chunk remained unsold.
The major reason behind dull response to the e-auction could be attributed to the fact that majority (96%) of the ore offered was of low-grade (i.e. having Fe content below 58%). Discount on low-grade Indian iron ore fines has been increasing continuously and presently it attracts a discount of 40-41%.
Recent sharp decline in global iron ore prices has worsened the situation further for Indian iron ore exporters. Spot iron ore prices in China declined drastically amid weakening futures.
Export offers for Fe 58/57% Indian fines have fallen by USD 11/MT M-o-M and are presently at USD 24/MT, FoB India.
Thus, it seems that looking at recent price decline, Indian low-grade iron ore exporters kept themselves away from participating in e-auction and procuring low-grade ore.
Iron ore exports from Goa moved up significantly since beginning of CY16. According to the customs data maintained with SteelMint, 18.17 MnT iron ore was exported from India’s ports in 2016. Mormugao occupied the largest share of 61% followed by Vizag and Paradip ports.
Note: Fig are excluding pellet exports
Leave a Reply