NMDC, India’s largest iron ore producer and exporter, has commence iron ore exports from Nov’15. Till date, three export vessels have been already exported and few more are in-line.
The company’s 4th shipment carrying 70,000 MT high grade iron ore to South Korea in vessel named ‘Sitc Hengshan’ is expected to reach Vizag Port till 21 Dec’15. Alongside, in this fiscal the 1st shipment carried 77,000 MT iron ore was exported in Nov’15, followed by 2nd shipment carrying 70,000 MT (2nd shipment to South Korea) and 3rd shipment carrying 78,000 MT are shipped in the month of Dec’15.
Sources mentioned that all the export shipments done in Q3 FY16 by NMDC will be according to quarterly average price index and export price would come around USD 51.6-52.6/MT, CFR South Korea.
Despite declining spot iron ore prices and overall down export, NMDC is continuing with iron ore export. Besides, the net realization from export price would not be that much beneficial to NMDC due to declining global iron ore prices.
In June’15, NMDC got approval of Long term Agreement (LTA) with Japanese and Korean mills to export 3.8 MnT to 5.5 MnT high grade iron ore fines for next 3 years. India has been exporting iron ore to these countries through LTA from decades. These agreement will bring out utilization of currently available surplus production of iron ore.
In regards to this, on 16th Oct’15, Indian govt. reduced export duty on iron ore exported by NMDC through LTAs by 20%. Current duties applicable for NMDC is 10% for high grade ore.
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