Spot Iron ore prices in Chinese sea borne market correct marginally by USD 1-2/MT, with 62 % Fe Australian fines being sold at about USD 94/MT CFR China. Buying sentiments continued to remain weak as Chinese crude steel production went down by 2.4% in 4th week of July as per Chinese Iron & Steel Association (CISA) data.
Steel mills prefer to wait & watch as prices for stock available on port have declined by RMB 5-10/MT..
Indian Imports up; Export down
Indian sellers are almost out of the market owing to high disparity between domestic & export prices. For an instance, 63% Iron fines in Odisha is being offered at around INR 2,600-2,700/MT on ex-mines basis (including royalty). Whereas, export realization for any miner for same grade would be INR 600-700/MT on ex-mines basis.
Export of Iron ore from India has fallen sharply and participants do not expect it to revive anytime soon.
With the Supreme Court’s directive of suspending mines running under 2nd deemed renewal has severely hit Iron ore production in the country forcing steel makers to go for imports.
As of now, total imports have been 1.1 MnT against total exports of 2.2 MnT in FY15 (till July). Most of the exports have been done by NMDC to Japan/Korea under long-term supply agreement.
Goa to auction 3 MnT in August
The 4th round of e-auction will be for 3.02 MnT ore expected to be conducted on 18 or 19 Aug, 2014. So far, the government has sold only 2.2 MnT through e-auction. The total amount of already excavated Iron ore stands at 11.48 MnT. This came after the Supreme Court gave its final order in Goa mining ban case. In this case, the court had asked the state government to e-auction the already excavated Iron ore till it finalizes mining policy on how to grant leases and resume mining in the state.
Interesting, the state government will also table the mining policy on the same date, which will set the direction for further mining activities in Goa.
Leave a Reply