Iron ore traffic at major Indian ports rose by over 100 per cent in December compared to the previous month, indicating rising demand for this key raw material of the steel industry.
A total of 1.89 million tonne iron ore was shipped out of 11 major Indian ports in December, up from 907,000 tonne in November. There was no shipment from Murmugao, the biggest iron ore exporting ports of the country by volume, as per Indian Port Association data.
The Goan port did not send iron ore following restrictions imposed by the state government. India mostly exports iron ore fines to China, the biggest producer of steel in the world.
However, Indian export volume has been sinking since the start of 2012 as the central government increased the export duty on iron ore from 20 per cent to 30 per cent.
Between April and December, Indian iron ore traffic plunged by 54 per cent to 21.7 million tonne as Chinese buyers shied away from Indian cargo, opting for Australian ore. Over the last nine months, India's share in Chinas iron ore import has dropped to 4-5 per cent from 10-12 per cent during the previous years.
The vacuum created by slump in Indian supply pushed global iron ore rates by over 80 per cent to $150 per tonne in December from one-and-a-half-year low of $87 in September. However, the price rise did not tempt Indian traders to book more export orders. The rate rise helped exporters to sell some of their unsold port stocks at a good price, but it did not contribute much to the total sales volume, said an official working with a large mining and exporting firm of the country.
The shipment volume went up because of rise in domestic deliveries, he added.
Out of the 1.89 million tonne traffic in December, Vishakhaptanam port alone accounted for one million tonne shipment. The share of inland traffic in this is more than 60 per cent, said Hanumant Rao of Eswar Shipping Services, based at the port.
Due to mining problem in Goa and Karnataka, steel makers have started sourcing the raw material from Odisha and Jharkhand. Maharashtra-based JSW Ispat has been buying iron ore from Odisha since August.
The traffic volume also includes a few hundred thousand tonne iron ore pellets, bought and sold by domestic steel plants within the country, Rao said.
