Indian Iron ore export noticed a negative growth in last few years owing to high duty, differential freight charges and regulatory measures. This has slowed down mining activities.
Over and above this, falling Iron ore prices in Chinese spot market and fluctuating Indian currency, has left Iron ore exporters with no other option but to cut down on their exports.
With recent fall in Chinese market, low grade Iron ore prices have fallen to such a level that Indian exporters have to hold their offers. According to them, the prevailing cost of export is higher by USD 7-9/MT on current prices in the spot market.
Say for an instance, Fe 58% Iron Fines with Alumina and Silica content above 7-8%, is being asked for USD 84-85/MT CFR China or USD 65-66/MT on FOB basis (including demurrage and misc. expenses). However, current cost of export is not less than USD 72-73/MT on FOB Basis.
“There is hardly any parity in Iron ore exports, most of Indian Iron ore traders and exporters are eyeing buyers in domestic market, which will certainly give them a better prices.” said an exporter based in eastern region.
Indian exports of Iron ore stood at around 15-16 MnT in FY14 against 18 MnT in FY13. However, with supreme court’s order on liquidation of stock and resumption of mining operations in Goa, will increase exports and may go up to 23-25 MnT in FY15.
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