Orissa iron ore exports tank in January after duty hike

Iron ore exports from Orissa, the country's biggest producer and third biggest exporter of this key steel making input, slipped significantly in January compared with December 2011 after the exports duty was raised to 30 per cent.

The state exported only 83,588 tonne iron ore in January, against 467,724 tonne shipped in the previous month, registering a whopping 82 per cent decline in month-on-month export volume, according data available from state Steel and Mines Department website.

“The December exports were higher because traders were aware about the impending duty hike. That's why many exporters sold ores below then prevailing markets rates,” said a Keonjhar-based export firm manager.

The Union Commerce Ministry raised export duty on iron ore to 30 per cent, up from 20 per cent made in 2011 April to discourage exports amid lower availability. With the latest hike, duty on iron ore exports has gone up by six times since March 2011.

In spite of the duty hike, prices of better quality iron ore remained between a narrow range of $132-$138 a tonne in global markets due to poor Chinese demand which was also the reason for shrinkage of export volumes, said traders.