Lifting of iron ore export ban cheers shipping firms

Indian shipping companies are looking to seize opportunities thrown up by the Supreme Court’s decision to revoke a ban on iron ore exports from Karnataka starting April 20.

Anil Devli, chief executive officer of the Indian National Shipowners’ Association, said, “It’s a good news that iron ore exports will restart. With this, it’s only fair to say that the Indian tonnage will benefit.” 

Rigan Wong of Citigroup Global Markets, in a report dated April 11, had said more exports out of India may lift dry bulk transportation demand. According to Wong, 25 million tonnes of additional iron ore exports out of India in the remaining eight months of 2011 would soak up around 4 million deadweight tonnage of dry bulk shipping capacity.

A R Ramakrishnan, director, Essar Shipping Ports & Logistics, said, “This lifting of export ban will definitely help Indian shipowners, as it used to happen in a big way from Karnataka. There is an opportunity to take advantage of and we are looking at it.”

Karnataka accounts for roughly 30 per cent of India’s iron ore exports. The state government had in July 2010 banned the exports of iron ore after reports of rampant illegal mining in the mineral-rich Bellary-Hospet region emerged.

Shipping Corporation of India’s Chairman and Managing Director, S Hajara, said, “Iron ore is a very important commodity and the lifting of the export ban is good for Indian shipping companies and will definitely help dry bulk carriers. Our vessels have been transporting iron ore on a regular basis to China and Far-East.”

Ramakrishnan said they were looking at increasing their iron ore shipments by 25 per cent. He agreed they had not been aggressive in iron ore cargo previously. Since addition to the company’s fleet will happen by the end of the year, Essar will look at deploying vessels for exporting iron ore to China, he said.

“There is an opportunity to put this additional cargo capacity in iron ore exports and we will look to that by the end of the year, as currently, all the vessels are occupied on other contracts. But yes, we are looking keenly at deploying our vessels for exporting iron ore to China.”

He said the company was looking for some long-term contracts to transport iron ore. “Long-term contracts make sense and that way, we can put our cargo to use effectively.”