Lower demand from Chinese steel producers and the monsoon affecting shipments has cut India’s iron ore exports by 45% to 5.6 million tonnes in June over the previous month, says a joint study by a group of iron ore exporters.
The country’s iron ore exports in June was flat in comparison to the same month last year, as per the study conducted jointly by Goa Mineral Ore Exporters Association, Kudremukh Iron Ore Company and government-owned trading house MMTC.
In the April-June quarter, iron ore exports stood around 26 million tonne, the same as the corresponding quarter the previous year.
“Chinese steel makers were negotiating with global iron ore majors on pricing of ore in June. Due to this Indian exports were hit as steel companies in China postponed purchases hoping to see steep price cuts from ore suppliers,” said Federation of Indian Mineral Industries secretary general RK Sharma.
He said heavy rains also added to the woes of exporters, particularly in Goa, as it adversely impacted supplies to the major ports. The state alone accounts for around 40% of the country’s total exports.
Chinese steel makers are still negotiating with global suppliers like BHP Billiton and Rio Tinto asking for price cuts of up to 50% on annual long term iron ore contracts. The price at which ore will be supplied to China will become the benchmark price for domestic market as well. Globally, iron ore prices increased more than 25% to $80-90/tonne early this month from $65/tonne in March.
Around 80% of the country’s ore exports go to China, while the balance goes to Japan and Korea. India produces close to 200 million tonne of iron ore every year.
Source: Economic Times
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