Goa Iron Exports Rise On Chinese Buying

Goa has surpassed the iron ore export target set for FY09, witnessing a 15 per cent rise in shipments recorded during FY08.

The mineral-rich state, which contributes about 40 per cent to the overall iron ore shipments from India, is estimated to record a total export of 45.5 million tonnes in FY09 compared to 39.5 million tonnes in the previous fiscal.

The growth is significant as the global financial turmoil has sharply brought down the Chinese demand in the aftermath of Lehman Brothers’ collapse in August last year. As a consequence, analysts were expecting a fall in India’s overall exports and its repercussion on shipments from Goa. Experts, early this year, had lowered their earlier exports target from 45 million tonnes to 40 million tonnes.

“Earlier we thought that the fall in Chinese demand would lower overall iron ore exports from Goa. But, a nice pick up during the December - March period compensated for the fall during the August - October period. Also, in the earlier months of the last fiscal (April - May 2008), the overall exports were fairly good,” said Glenn Kalavampara, secretary of Goa Mineral Ore Exporters’ Association (GMOEA).

“We are yet to finish compiling the final figure on overall exports. But, initial indications hint that shipment would rise 15 per cent during the last financial year,” Kalavampara said.

Goa is endowed with huge mineral deposits, largely between the grades of 50-61 per cent of iron content.

While the volume picked up during the last year, price remained under pressure of the iron ore. Prices of iron ore of the average grade of $57-58 has nosedived over 57 per cent since April 2008 to $30 a tonne now.

Both iron ore prices and exports showed inconsistencies last fiscal, said Kalavampara. The extended monsoon and late turnouts of mineworkers hit shipment by the end of the first half when global financial crisis began to affect on steel demand. Fearing a grave impact on infrastructure and therefore, lower steel demand, primary and secondary producers cut their output by up to 25 per cent. That hit iron ore demand in both local and global markets.

In the meantime, pipeline inventories of iron ore exhausted completely which forced steel producers to build stocks again thereby, helping miners to transport ore to steel mills.

During the year, Mormugao Port Trust (MPT) recorded a 23.85 rise in iron ore shipment at 33.81 million tonnes as against 27.30 million tonnes in the previous year. Of this, exports to China surged a staggering 41.52 per cent to 28.77 million tonnes as against 20.33 million tonnes.

Shipments to Japan, in contrast, declined 9.62 per cent at 3.11 million tonnes from 3.43 million tonnes. During the year, the port touched an all time record cargo traffic of 41.68 million tonnes, surpassing its previous best of 35.13 million tonnes handled in 2007-08.

Source: Business Standard