Iron ore exports fall 13% on soft Chinese demand

India’s iron ore exports declined 13.31 per cent as economic recession affected global demand for the ore as demand for steel fell.

Total exports plunged to 55.8 million tonnes during April 1 - December 15 of the current fiscal compared to 64.38 million tonnes during the corresponding period last year. Shipments, however, witnessed a marginal decline of 3.81 per cent to 5 million tonnes during the first fortnight of December from 5.2 million tonnes seen during the same period last year, according to data collated by the Federation of Indian Minerals Industries (FIMI).

Indian iron ore exports rose slowly late October. But, orders rose as steel mills in China that were closed last year for Olympic Games, began their operations gradually. It will be difficult to achieve last year’s level, said Glenn Kalavampara, secretary of Goa Mineral Ore Exporters’ Association (GMOEA).

Total shipments from Mormugao port in Goa during the first fortnight of December dipped 27.18 per cent to 20.84 million tonnes over that seen during the corresponding period last year. Goan exporters ship mainly low grade iron ore from Karnataka and Goa to Chinese steel mills.
 

DEMAND DOWN Iron ore exports balance sheet (lakh tonne)
Month	2007-08	2008-09	%Chg
Apr	83.77	114.90	37.16
May	94.15	84.95	-9.77
Jun	59.41	56.32	-5.20
Jul	51.62	50.74	-1.70
Aug	53.88	41.55	-22.88
Sept	54.99	30.78	-44.03
Oct	83.68	41.39	-50.54
Nov	101.25	87.40	-13.68
Dec (1-15)	52.02	50.04	-3.81
Total	643.77	558.07	-13.31

Haresh Melwani, CEO, H L Nathurmal & Co, a leading iron ore miner and exporter from Goa attributed the decline in exports to three major factors: frequent changes in exports levy on fines and lumps (the two grades of iron ore below and above 64 per cent of iron content respectively), slowdown in Chinese demand and buyers lenience towards Australia and Brazil because of a favourable government policy.

Melwani also forecast a 25 per cent decline in exports of iron ore from Goa to 20 millions last year. Similarly, both Karnataka and Goan-origin iron ore exports may also fall to 30 million tonnes compared to 40 million tonnes last financial year, Melwani added.

Last year, the government levied exports levy by Rs 300 per tonne which was later restricted to lumps only. Again, fines was brought under tax net and withdrawn after severe resistance from mining industry.

According to initial indications, the public sector National Minerals Development Corporation has posted 35 per cent decline in sales in December after 65 per cent and 40 per cent fall in November and October respectively.