India iron ore exports likely to decline by 50pct in March - FIMI
India’s iron ore exports are likely to decline by 50% in March 2011 due to lower demand from China, the biggest buyer and discouraging sentiment for domestic mining companies.
Mr RK Sharma secretary general of Federation of Indian Mineral Industries said that "The 20% ad valorem export duty levied by the finance minister in the budget is set to badly affect shipment of the steel making raw material. Since the proposed duty is made applicable from March 1, its implication will begin this month. We expect exports not to go beyond 5million tonnes to 6 million tonnes.”
In March 2010, Indies iron ore shipment was 13 million tonne.
FIMI data show ore exports declined in February for the eighth month in a row. The downswing began in July 2010. Traders say its due to uncertainty in the global steel market and the reluctance of China, a prime importer, to take more from India at this stage.
India’s iron ore exports declined 18.6% to 10.1 million tonne in February from 12.45 million tonne in the corresponding month of the previous year. Over the 11 months from April to February of the current financial year, total shipment abroad dived 18 per cent to 85.4 million tonne as compared to 104.1 million tonne in the corresponding period of the previous year. For the full financial year 2009-10, total ore exports were 117 million tonne.
Mr Sharma believes the coming months are likely to remain challenging for both miners and exporters. Overall exports are expected to touch 90 million tonne this financial year.
Mr Sharma attributes the fall to the Karnataka governments decision to ban transportation of steelmaking raw materials outside the state. The state high court upheld the order and the matter has been appealed at the Supreme Court by mining companies. Yet, miners have already cut excavation capacity by 65 to 70% in the state. The next hearing is on the coming Monday.
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