BS reported that rise in the prices of iron ore in international markets and depreciating rupee has prompted a many exporters to begin export of iron ore fines and pellets. A bunch of exporters have booked 5 shipments of pellets for September delivery to buyers in China as the prices have moved up 10.5% to USD 136 per tonne.

 

Mr Prakash Duvvuri head of research at mining and metal information website Ore Team said that “The exporters were holding on to their stocks for a month in anticipation of export duty reduction by the government. As the prices have improved overseas they have started booking exports to take the benefit. The rupee depreciation has also encouraged them to start exports of fines and pellets.”

 

Nearly half a dozen exporters have booked export consignments from Paradip and Vizag ports on eastern coast for September delivery to Chinese buyers. According to reports five ships with 50,000 tonnes of pellets each are being shipped. As of end July and early August, the exporters were holding on to their stocks in anticipation that government will reduce duty on exports to 15% to 20% from 30%.

 

Between April and July 2013, the country has exported 3.92 million tonnes of iron ore (provisional) as against 13.4 million tonnes in the corresponding period, showing a decline of 240%.

 

Mr Duvvuri said that the rupee depreciation might encourage more exporters to look for shipments overseas this year. An average of at least one million tonnes of iron ore fines per month could be exported this year. Also, the rise in pellet prices has prompted Indian producers to look for exports of pellets this year. In the recent days, the prices of pellets have improved from INR 6,200 per tonne a month ago to INR 6,700 per tonne currently, showing a rise of 8%.

 

He said that there is a surplus production of pellets in the country. Out of a total installed production capacity of 56 million tonnes, Indian companies are producing 38 million tonnes annually. Of this about 25 million tonnes are consumed in the domestic market while the remaining 13 million tonnes are available for exports.

 

In 2012 to 2013, India’s iron ore exports declined 73% to 18.66 million tonnes as against 68 million tonnes in the previous year. This was mainly due to ban in Goa, Karnataka and restrictions on mining in Odisha last year. Export duty of 30% and differential freight policy adopted by the Indian Railways also contributed to decline in exports.

 

He added that “If mining resumes in Goa by October this year, we could expect an additional 10 million tonnes of iron ore exports during the current fiscal. Otherwise, the country will end up exporting about 12 million tonnes, an all time low compared to 18.66 million tonnes last fiscal.”