India: Iron ore Exports from Goa Fall Significantly Post Mining Suspension

Iron ore industry in Goa has come to a standstill from 16 Mar’18 with Supreme Court’s order of canceling 88 mining leases. According to customs data maintained with SteelMint, iron ore exports from Goa’s Mormugao port decreased sharply by 57% in May’18 (till 24th May 2018) to 0.5 MnT against 1.16 MnT in Apr’18.

Total Indian iron ore export is expected to decrease sharply by 38% M-o-M in Apr’18 to 0.76 MnT against 1.22MnT in Apr’18.

SteelMint has learned from market sources that Goan miners are only allowed to export iron ore mined previously to the ban imposition, on which royalty has been paid, and lying at jetties, not the iron ore lying at mines head. Next hearing in the Court is expected to be heard in Jun’18.

If market sources are to be believed there is not much material left with Goan exporters and volumes will fall further in coming days. Low-grade iron ore Fe 56% fines are heard to be traded at around 44-45% discount against an index.

Reason for the iron ore export decline from Goa-:

1. Imposed mining ban operations in Goa -: The declining exports from Goa mines owing to the shutdown of mining operations at 88 mining lease post 15th Mar’18 resulted in fall in export volumes.

2. Chinese mills going for High-grade Raw material-: China production restrictions due to environmental regulations and the SCO summit going to held too in Qingdao has affected market sentiment. As buyers in China prefer to buy low alumina Brazilian iron ore (Carajas fines) resulted still mills are using the high-grade material. Global iron prices also downtrend which make a conducive market to get high-grade material at a lower price.

Goa occupied a significant share in Indian iron ore exports. On yearly basis in CY’17, Mormugao port accounted for the largest share in iron ore exports at 10.95 MnT in CY’17 against 11.14 MnT

Iron ore Export from Goa Mormugao Port in May’18-:

Qty In MT
Source: SteelMint Research