You are here: Home » Economy & Policy » News
Business Standard

After a 23% start, iron ore cargo growth at major ports turns flat in Dec

The reason: slackening exports of low grade ore, with demand from China down to a trickle

Jayajit Dash  |  Bhubaneswar 

Iron ore traffic pulls down overall cargo growth in major ports: Report

Growth in cargo volumes shipped through major ports including the intermediate steel product pellets, narrowed sharply to 1.36 per cent at the end of December 2017. Total iron cargo in April-December 2017 stood at 33.4 million tonnes, almost flat compared to 33.01 million tonnes in the same period of FY17. This is a departure from the trend observed in April-September of FY17. Till September, traffic was the key driver at major loading ports such as Paradip, Visakhapatnam and Mormugao. Growth in shipments, inclusive of pellets through major ports was 23 per cent. Major beneficiaries from the spike in iron ore cargo were the ports of Paradip, Kandla, and As exports of iron ore, especially from major producing states like Odisha were on an uptrend, this strengthened cargo growth. Besides exports, domestic movement of from ports to the hinterland also got a fillip due to buoyant demand for the commodity. However, since then the iron cargo trend is reversing. A mining industry source said, exports from are lacklustre as demand from for low grade has waned. As cracks down on its industries to tackle heightened pollution, steel industries there have been more inclined to source higher grade The downtrend is amply reflected in Mormugao’s cargo numbers, especially during April-December.

During this period, traffic crashed 38 per cent to 5.7 million tonnes from 9.3 million tonnes in the year-ago period, according to data by the Indian Ports’ Association. The share of to the port’s total cargo is more than 30 per cent. Mormugao port ships mostly low grade ore (below 58 per cent) produced by Goa’s mines. The government has waived off export duty for this low grade ore which hardly has any domestic demand. For port too, traffic was flat. cargo for other key loading ports like Kolkata, and was positive for the period. FY17 had proven to be a major comeback year for as the commodity surged 163 per cent in volumes shipped by major ports. It was largely on the strength of iron ore traffic that Mormugao port registered the highest growth of 59.7 per cent among all major ports in FY17. Waiver of 30 per cent export duty on low grade iron ore fines and lumps (with iron content less than 62 per cent) chiefly from buoyed export bound iron ore cargo from the port. The ports on the eastern sector- and Visakhapatnam were the other big gainers from revival in iron ore cargo. The outlook for movement, both exports and hinterland bound traffic is depressing for the January-March period. Closure of seven working mines in Odisha with a combined annual capacity of 20 million tonnes will hurt traffic. Also, according to projections by (Fimi), exports are expected to be slower compared to last fiscal as higher grade (above 58 per cent) is still taxed at 30 per cent.

First Published: Fri, January 26 2018. 17:39 IST