Iron ore cargo through major ports dropped 2.75% in 2017-18

Iron ore cargo carried by major ports in the country saw a decline of 2.75 per cent in 2017-18, as flagging demand for exports of lower grade ore weighed.

The volume of iron ore shipments via major ports fell to 4.85 million tonnes (mt) last financial year, against 4.99 mt in FY17. Strikingly, iron ore ended up as the only commodity to record de-growth in traffic handled by major ports, while others like liquid cargo, fertilisers, thermal and steam coal made sizeable gains.

Fragile demand for iron ore exports for iron ore of Goa’s origin, coupled with the un-remunerative realisations for higher-grade ore (Fe content of more than 58 per cent) produced in Odisha and Jharkhand held exports back. Consequently, the dipping export volumes shrank iron ore traffic at major ports, especially the ones on the eastern coast, such as Paradip, Visakhapatnam, Haldia, et al. Iron ore with Fe grade beyond 58 per cent still attracts 30 per cent export tax, though this levy has been waived for the ore below 58 per cent.

Mormugao Port’s total cargo handling tanked 18.94 per cent in 2017-18, data from the Indian Ports Association revealed. The port, which had handled 1.5 million tonnes of iron ore cargo in FY17, witnessed its traffic tapering to 1.02 million tonnes at the end of FY18. Usually, iron ore shipments have a share of nearly 50 per cent in the port’s cargo handling.

Both Odisha and Jharkhand saw their iron ore stockpiled at mine heads expanding steadily. The stocks of the two states together account for 85 per cent of the accumulated iron ore. Stakeholders feel the only escape outlet for such piled-up ore is through exports. But, for exports to be made lucrative, the existing 30 per cent duty has to be waived off.

The growth for commodities other than iron ore was in the positive territory for major ports. Last financial year, thermal coal grew 2.77 per cent, whereas coking coal was the best performer in terms of cargo volumes, with growth of 8.62 per cent. Liquid cargo, raw fertilisers and container shipments were up by over seven per cent.