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Iron ore exports to lose steam in FY18 on weak price outlook

Govt's measures of imposition of 30% export duty to conserve iron ore for steel units tanked exports

Jayajit Dash  |  Bhubaneswar 

Iron ore exports to lose steam on weak price outlook

After staging a sharp recovery in the financial year (FY) 2017, from the country may lose momentum in FY18 as has entered the bear territory.

of rose four-fold in 2016-17 to 24 million tonnes (mt) compared to six mt in the year-ago financial year. were largely helped by a spike in international that touched a peak of $95 a tonne. 

Strong price sentiment was fuelled by demand pick up in where inventory at ports reached a record 133 mt, the highest since 2004. The surge in had sparked hope of revival in from India which has once been a leading player in the global seaborne

However, the collapse in has doused hopes for exporters. Benchmark of tumbled to a six-month low of $61 per tonne, plunging 30 per cent from the February peak before rebounding 2.2 per cent to $64.

"had picked up on bullish price trends. Even with the steep export duty of 30 per cent, miners were able to pocket margins of $28 per tonne. However, the slide in is a setback. At $60-65 a tonne, is not viable", said a leading exporter from Odisha.

Analysts do not see any major appreciation in later this year to bounce back to the peak levels. are expected to hover in the range of $60-70 a tonne.

Giriraj Daga, an investment manager with K M Visaria Family Trust said: "are unlikely to rebound as has cut steel production. Steel demand has suffered and thus will exert a downward pressure on India is unlikely to regain its lost position in the seaborne as price outlook is subdued. Moreover, many key mines in Karnataka and Goa are still out of operation."

from the country had peaked at 127 mt in 2011-12. Since then, have tanked with the government's protectionist measures like imposition of a 30 per cent export duty to conserve for domestic fell to a historic low of five mt in 2014-15 when the country turned a net importer of

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Iron ore exports to lose steam in FY18 on weak price outlook

Govt's measures of imposition of 30% export duty to conserve iron ore for steel units tanked exports

After staging a sharp recovery in last fiscal, iron ore exports from the country may lose momentum in FY18 as iron ore trade has entered the bear territory.Exports of iron ore rose four-fold in 2016-17 to 24 million tonne (mt) compared to six mt in the year ago fiscal. Exports were largely helped by a spike in international prices that touched a peak of $95 a tonne. Strong price sentiment was fuelled by demand pick up in China where iron ore inventory at ports reached a record 133 mt, the highest since 2004. The surge in exports had sparked hope of revival in iron ore exports from India which has once been a leading player in global seaborne trade.But, the collapse in iron ore prices have doused hopes for the exporters. Benchmark prices of iron ore tumbled to a six-month low of $61 per tonne, plunging 30 per cent from the February peak before rebounding 2.2 per cent to $64."Iron ore exports had picked up on bullish price trends. Even with the steep export duty of 30 per cent, miners .. After staging a sharp recovery in the financial year (FY) 2017, from the country may lose momentum in FY18 as has entered the bear territory.

of rose four-fold in 2016-17 to 24 million tonnes (mt) compared to six mt in the year-ago financial year. were largely helped by a spike in international that touched a peak of $95 a tonne. 

Strong price sentiment was fuelled by demand pick up in where inventory at ports reached a record 133 mt, the highest since 2004. The surge in had sparked hope of revival in from India which has once been a leading player in the global seaborne

However, the collapse in has doused hopes for exporters. Benchmark of tumbled to a six-month low of $61 per tonne, plunging 30 per cent from the February peak before rebounding 2.2 per cent to $64.

"had picked up on bullish price trends. Even with the steep export duty of 30 per cent, miners were able to pocket margins of $28 per tonne. However, the slide in is a setback. At $60-65 a tonne, is not viable", said a leading exporter from Odisha.

Analysts do not see any major appreciation in later this year to bounce back to the peak levels. are expected to hover in the range of $60-70 a tonne.

Giriraj Daga, an investment manager with K M Visaria Family Trust said: "are unlikely to rebound as has cut steel production. Steel demand has suffered and thus will exert a downward pressure on India is unlikely to regain its lost position in the seaborne as price outlook is subdued. Moreover, many key mines in Karnataka and Goa are still out of operation."

from the country had peaked at 127 mt in 2011-12. Since then, have tanked with the government's protectionist measures like imposition of a 30 per cent export duty to conserve for domestic fell to a historic low of five mt in 2014-15 when the country turned a net importer of

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Business Standard
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Iron ore exports to lose steam in FY18 on weak price outlook

Govt's measures of imposition of 30% export duty to conserve iron ore for steel units tanked exports

After staging a sharp recovery in the financial year (FY) 2017, from the country may lose momentum in FY18 as has entered the bear territory.

of rose four-fold in 2016-17 to 24 million tonnes (mt) compared to six mt in the year-ago financial year. were largely helped by a spike in international that touched a peak of $95 a tonne. 

Strong price sentiment was fuelled by demand pick up in where inventory at ports reached a record 133 mt, the highest since 2004. The surge in had sparked hope of revival in from India which has once been a leading player in the global seaborne

However, the collapse in has doused hopes for exporters. Benchmark of tumbled to a six-month low of $61 per tonne, plunging 30 per cent from the February peak before rebounding 2.2 per cent to $64.

"had picked up on bullish price trends. Even with the steep export duty of 30 per cent, miners were able to pocket margins of $28 per tonne. However, the slide in is a setback. At $60-65 a tonne, is not viable", said a leading exporter from Odisha.

Analysts do not see any major appreciation in later this year to bounce back to the peak levels. are expected to hover in the range of $60-70 a tonne.

Giriraj Daga, an investment manager with K M Visaria Family Trust said: "are unlikely to rebound as has cut steel production. Steel demand has suffered and thus will exert a downward pressure on India is unlikely to regain its lost position in the seaborne as price outlook is subdued. Moreover, many key mines in Karnataka and Goa are still out of operation."

from the country had peaked at 127 mt in 2011-12. Since then, have tanked with the government's protectionist measures like imposition of a 30 per cent export duty to conserve for domestic fell to a historic low of five mt in 2014-15 when the country turned a net importer of

image
Business Standard
177 22