Goa Miners will get ex-mines realization of INR 1,000/MT for Fe 57% Fines which is currently at USD 31/MT FoB, India
Global iron ore prices showed sudden increase post Chinese holidays. Currently prices touched to a level of USD 50/MT, CFR China. Prices have increased post holiday by USD 7/MT as mill resume buying. Price may remain firm due to tight supply from Australia to China upon weather disruption.
Increase in global iron prices in China may also increase viability of iron ore exports from India to China. As far as we can see, at today’s date, Indian iron ore exports have been exported to China mainly from Goa. Goa mainly exports low grade ore to China.
Currently, prices for Fe 57 fines are hovering in the range of USD 36-38/MT, CFR China. However, prices of transactions occurred to China from India for Fe 57 fines are concluding as per the index itself.
Exports from Goa resumed from Sep’15 as the government reduced export duty to 10% from 30% on exports of low grade iron ore. Henceforth, exports from Goa gears up. Uptill now, Goa exported around 2.36 MnT iron ore till date in FY16 to China. Apparently, major players named Vedanta, Fomento Resources and VM Salgaokar exports majorly low grade ore to China.
Below is the estimated analysis of cost of exports for Fe 57% fines from Goa
| Particular | Prices | |
| In INR | In USD | |
| FoB India (Fe 57%) fines | 2,123 | 31 |
| Export Duty@10% of FoB | 212 | 3.1 |
| Goa Iron ore Permanant Fund@ 10% | 191 | 2.8 |
| Moisture@4% | 85 | 1.2 |
| Royalty @15% | 103 | 1.5 |
| DMF @30% of Royalty | 31 | 0.5 |
| Road Freight | 250 | 3.7 |
| Local Handling | 250 | 3.7 |
| Ex-mines realisation | 1,001 | 14.5 |
FoB price as per index as on 22 Feb’16
1 USD=68.5 INR
Source: SteelMint Research
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