Top News

|  DP World reports 10.7% gross volume growth in Q2 2017  |    |  Major Ports post combined net surplus of INR 2820 cr in FY 2017  |    |  Odisha sets a target to reach INR 1 lakh cr exports by 2025  |    |  Shapoorji Pallonji Group to spend INR 2,000 cr in Odisha Gopalpur Port  |    |  Air India SATS Airport Services launches mobile app for tracking cargo  |    |  IndiGo & Jet introduce additional flights to Doha, Mumbai from Kozhikode  |    |  Port of Rotterdam registers impressive container throughput rise in H1  |    |  New waterways to connect India with Bangladesh  |    |  Yang Ming to start New Korea-Taiwan-Hong Kong service  |    |  DFC to be commissioned in 2 years  |    |  Domestic air traffic up 20% in June  |    |  No new port in 100 km vicinity of major ports  |    |  IRCTC to install 1,100 water vending machines at railway stations  |    |  Port of Antwerp first half volume increases by 1.9% to 5,143,305 TEU  |    |  Asia-Europe rate falls 2.1% to USD 919 TEU, declines 3.1% to USWC  |    |  Operations at international cargo terminal likely to begin soon  |    |  Haicang Port sees 1H cargo rise 20.7% to 3.12 million TEU  |    |  Bahri gets delivery of 39th VLCC, strengthens its leading position  |    |  Shreyas Shipping & Logistics signs MoA to acquire one Multipurpose vessel  |    |  Businessman to sell 12% stake in CIAL  |   
You are here: Home » National News » Supply Chain» Iron ore export slumps with fall in global prices

Iron ore export slumps with fall in global prices

26 June 2017 | New Delhi


Iron ore exports from India were down 53% in the past two months as China, a major consumer, took better quality ore from Australia to feed its integrated steel plants, taking advantage of a slump in global prices.

Macquarie Research says after a surge in iron ore export to 49 million tonnes (mt) in March, these slumped to 23 mt in May. With seaborne ore prices down 40% from the peak in late February, the Indian high-cost export is fading away.

It said that Shipments from Goa have become unviable and volumes from the east coast have started diverting to domestic markets.

Spot iron-ore prices have slumped to USD 55 a tonne, from a recent peak of USD 94.5 a tonne in late February. Indian iron ore production saw 23% growth in FY17 over a year before, at 190 m.

The report forecasts production to grow to 206 mt, up 8%. With declining export, it expects a domestic surplus of 18 mt in FY18, adding to the surplus of 14 mt in FY17. According to an industry expert, the worst sufferer is Vedanta Resources, which has mining capacities in Goa.

"On the domestic front, steel companies have the option of receiving a higher grade (more than 57 per cent iron content) through import, a cheaper option (now) for them than sourcing from Goa. And, internationally, China is ramping up its steel production capacity, sourcing higher quality ore from Australia."

The market for low grades is getting tough, as most steel mills are focusing on higher grades to increase productivity. Chinese steel consumption has been higher than expected and prevailing steel prices provide for respectable profit margins to these mills, Macquaire said.

Since the mining ban was lifted in India in 2015, mining companies here have gradually raised the output of low-grade ore, it said. International prices had gone up to as high as USD 80 a tonne in November 2016 and that supported the Goan mining industry. Indian miners' cost of delivery to China is a little less than USD 30 a tonne. Macquarie expects this cost to reduce further.

Its report says, "We remain bearish on iron ore miners, with an 'Underperform' rating on NMDC. We recommend non-integrated producers like JSW Steel and remain bearish on integrated producer Tata Power."

Transreproter Logo