“Exporters were holding on to their stocks since a month in anticipation of a cut in export duty by the government. As prices have improved abroad, they have started booking export contracts to benefit from the rupee depreciation,” said Prakash Duvvuri, head of research, Ore Team, a mining and metal information website.
Nearly half a dozen exporters have booked consignments from Paradip and Vizag ports on the eastern coast for September delivery to Chinese buyers. According to reports, five ships with 50,000 tonnes of pellets each are being shipped.
As of the end of July and early August, exporters were holding on to their stocks in anticipation that the government will reduce duty on exports to 15-20 per cent from 30 per cent earlier.
Between April and July, the country had exported 3.92 million tonnes (mt) of ore (provisional figures) as against 13.4 mt in the corresponding period, a decline of 240 per cent, he said.
Duvvuri said the rupee depreciation might encourage more exporters to look for shipments abroad this year. An average of at least 1 mt of iron ore fines per month could be exported this year. Also, the rise in pellet prices has prompted Indian producers to look for their export this year. In recent days, prices of pellets have increased eight per cent from Rs 6,200 a tonne a month ago to Rs 6,700 a tonne currently, he said.
In 2012-13, India’s iron ore exports declined 73 per cent to 18.66 mt, against 68 mt in the previous year. This was mainly due to ban in Goa, Karnataka and restrictions on mining in Odisha last year. Export duty of 30 per cent and differential freight policy adopted by the Indian Railways also contributed to decline in exports.
“If mining resumes in Goa by October this year, we could expect an additional 10 mt of iron ore exports during the current financial year. Else, the country will end up exporting about 12 mt, an all-time low compared to 18.66 mt last fiscal,” Duvvuri added.