India's iron ore industry expressed disappointment on Friday with the interim railway budget, saying that the decision not to reduce freight rates will push commodity traffic down. This will hit the producers who are yet to see any upturn in trade. "We are disappointed. We wanted it (freights) to go down," Federation of Indian Mineral Industries President Rahul Baldota said.
Domestic iron ore producers - dominated by Vedanta Group firm Sesa Goa, Essel Mining and MSPL - saw their profits shrink in the third quarter of the present fiscal year as iron ore demand and prices fell steeply amid the global industrial downturn.
At present, iron ore spot prices have come down by about USD5 a tonne since last week, when it touched USD 70 per tonne, said Mr Baldota. Iron ore prices touched the peak of USD 150 a tonne last year then fell by over 60 per cent.
Miners, who saw the offtakes improvein January mainly on renewed demand from China, one of the biggest consumers of Indian iron ore, say the present freight structure will discourage the movement of the vital steel-making mineral. "The traffic is bound to fall and thus will the exports," he said.
Source: The Hindu
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