India’s iron ore exports may plunge at least 25 percent this fiscal year after competitors cut prices to win customers in China, the world’s largest buyer of the steelmaking ingredient, an industry body said.
Exports will drop from the 105 million metric tons sold in the year ended March 31, R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, said in an interview in New Delhi today.
Australia’s BHP Billiton Ltd., the world’s largest mining company, said this month it sold more iron ore on the cheaper cash market after customers deferred some contract delivery. India was the largest seller of iron ore to China on the cash market, and its ore was usually of lower quality than those sold by BHP, Rio Tinto Group and Brazil’s Cia. Vale do Rio Doce.
“India’s exports will fall by 25 percent at least because we are less competitive than Australian sellers,” Sharma said. “The fall may be more if India does not lower railway freight costs and improve roads.”
Steelmakers have cut purchases of iron ore as demand for cars, buildings and appliances dropped in the global recession. Spot prices traded at $63 a ton, below the February high of $84 a ton, Citigroup Inc.’s analyst Johan U. Rode said April 3.
Prices of Indian ore have dropped to $48 a ton, Sharma said today. “Prices will remain weak,” he said.
India’s iron-ore exports recorded in the year ended March 31 were little changed from a year earlier, Sharma said.
Source: Bloomberg
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