India exported 5.9-million-tonnes of iron ore in July, a 2% increase over the same period last year after clocking 26 million tonne of exports during the April-June quarter, the same as the year-ago period, according to data collated by Association of Iron Ore Exporters.
The growth comes at a time when the finance ministry is considering a proposal by the steel ministry to levy 10% tax on export of iron ore to ensure availability of ore to domestic steel makers. Iron ore is a key input in steel making.
The steel ministry recently wrote to finance minister Pranab Mukherjee suggesting that the proposed export duty has become essential for ensuring availability of iron ore to domestic steel companies, which have been facing lower supply of the raw material for the past 5-6 months.
Such a move would affect top iron ore exporters such as Sesa Goa, MSPL, Roongta Mines, Chowgule, besides government-owned trading house Mineral and Metal Trading Corporation(MMTC).
The iron ore exports rose around 5.4% in July from 5.6 million tonne in June, according to the study conducted jointly by Goa Mineral Ore Exporters Association, Kudremukh Iron Ore Company and MMTC.
“Demand for ore is coming mainly from small steel makers in China, which are dependent on the raw material sold in the spot market,” said RK Sharma, secretary general, Federation of Indian Mineral Industries.
Iron ore exports will continue to vary over the next few months till demand revives from large steel producers, he added. The large steel makers in China are still negotiating with global ore suppliers like BHP Billiton and Rio Tinto seeking price cuts of up to 50% on annual long-term iron ore contracts. As a result, supply orders for the large Chinese steel firms are yet to pick up. India produces close to 200 million tonne of iron ore every year, half of which is exported.
Around 80% of the country’s ore exports go to China, while the rest to Japan and Korea.
Source: Economic Times
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