India’s iron ore exports down 12.3 percent in H1 FY 2011-12

Thursday, 13 October 2011

According to the data issued by the Indian Ports Association, in the first half of the Indian fiscal year 2011-12 (started March 31) iron ore exports from India's main ports reached 31.59 million mt, down 12.3 percent year on year. This figure accounts for approximately 80 percent of India's total iron ore exports.

In the given period, iron ore exports decreased at most of India's ports on year-on-year basis, except for the Port of Visakhapatnam with iron ore exports of 9.72 million mt, up 9.7 percent year on year. In August alone, iron ore exports from the Port of Visakhapatnam increased by 27.8 percent year on year.

(sourced steelorbis)

Indian iron ore exports may decline by 28pct in 2011

Wednesday, 24 Aug 2011

It is reported that Indian iron ore exports are likely to decline 28% this year on falling domestic production due to mine closures across the country.

According to Mr RK Sharma secretary general of the Federation of Indian Mineral Industries, total exports are likely to slump to around 70 million tonnes this financial year, due to fall in production by major private mines.

Total exports from India declined 17% to 97.65 million tonnes in the financial year 2010-11 as compared to 117.37 million tonnes in the earlier financial year.

Iron ore supply to domestic steel and downstream sector units was also hampered due to miners unwilling to continue excavation as domestic steel mills do not lift low grade fines.

Meanwhile, low availability has helped the iron ore price rise to USD 190 a tonne for 63.5 grade iron content. Downstream sectors like foundry, sponge iron and pig iron units, however, are facing a huge slump in demand, due to an overall unfavorable economic environment.

Following a Supreme Court order two months ago, private mining in Karnataka is suspended. The central and state governments also went hard on mining clearances for iron ore miners in other states. Consequently, supply dipped 50% as miners apprehend pumping in of fresh money on excavation, amid fear of action either by the government or the judiciary.

(Sourced from BS)

Keeping more iron ore at home, India exports seen halved

Mon Aug15, 2011
By Manolo Serapio Jr and Siddesh Mayenkar

SINGAPORE/MUMBAI (Reuters) - India's iron ore exports, which fell for the first time in a decade last year, could halve over the next five years as the country feeds the expansion of its steel industry.

Lower shipments from the world's No. 3 exporter should help bolster prices that have already more than trebled from late 2008, as massive increases in global supply are only expected to come through by 2015 and demand from top consumer China rises.

"Indian exports are in a structural decline as resource nationalism becomes a bigger driver behind policy. The policy is definitely not encouraging exports," said Graeme Train, commodity analyst at Macquarie in Shanghai.

In a bid to curb overseas sales, India has raised freight rates and quadrupled export taxes on iron ore fines, the sandy material that typically contains 55-65 percent iron and which comprises around 70 percent of its annual output of about 200 million tonnes.

India's iron ore output and exports,

Iron ore exports from India fell 17 percent to 97.6 million tonnes in the year to March, largely due to a ban on shipments from the key producing state of Karnataka.

Analysts in a Reuters poll forecast another drop to eight-year lows this year on increased costs and a delay in resumption of shipments from Karnataka, source of around a quarter of India's exports.

Tight Indian supplies and booming Chinese demand lifted spot iron ore prices to record highs above $190 a tonne in mid-February. They are currently trading near $176.

EXPANDING STEEL SECTOR

The world's fifth-largest steel producer, India is aiming to lift output to 120 million tonnes by the end of 2012 from nearly 67 million tonnes in 2010, as the likes of steel giants ArcelorMittal and POSCO expand their reach into Asia's third-largest economy.

India is looking at 8.2 percent growth this fiscal year, after expanding 8.5 percent last year, underscoring the need to boost domestic steel output and consumption of iron ore.

With the expansion in its steel sector, the country's iron ore exports are forecast to fall to roughly half of the 97.6 million tonnes shipped in the last fiscal year by the year to March 2016, said Gunmeet Singh, analyst for CRU in Mumbai.

India's traditional steel blast furnaces can use only iron ore lumps, but there is a growing move among steelmakers to invest in more pelletizing and sintering plants that can take the iron ore fines now mostly exported to China.

Singh estimates that the country's pelletizing capacity will triple to 90 million tonnes in five years and its sintering capacity will increase 55-60 percent from 53 million tonnes.

"In many ways the efforts to prevent exports of iron ore are more to support the domestic steel industry which will benefit from much lower raw material costs," said Christopher Ellis, analyst with Metal Bulletin.

While land acquisitions remain a big hurdle that could disrupt India's plans, with protests continuing against POSCO's planned $12 billion steel mill that was meant to start producing this year, there is a pending bill in parliament aimed at boosting payouts to poor villagers for industrial projects developed on farmland.

MARGIN SQUEEZE, KARNATAKA FREEZE

Apart from imposing higher taxes to stop iron ore exports, India also hiked freight rates twice this year, making carriage costs for exports five times more expensive than those for ore for local consumption.

The increased taxes and tariffs pushed the average cost for Indian iron ore to $100 per tonne, more than double the production cost in Australia and Brazil, said Train.

"That would put Indian material at the top of the cost curve this year. They're almost better off selling into the domestic market," said Train.

The higher cost slashed margins of producers, after taking out handling and shipping fees.

"Before the tax hike, miners earned $40 per tonne, but after the tax incursions the margins have diminished to $10-$20," said Dhruv Goel, managing director at Orissa-based Steel Mint.

"The middle man hardly gets $1 (per tonne)."

Indian exports also suffered from a ban on shipments from the iron-ore rich state of Karnataka, source of around a quarter of the country's annual exports, from July 2010, as part of the state's crackdown on illegal mining.

The Supreme Court ordered the ban lifted in April but that order has yet to be carried out with the state government citing procedural delays as it installs monitoring and tracking systems. Political infighting may further progress.

Gavin Montgomery, iron ore analyst at Wood Mackenzie, said he expects Indian shipments to fall to 65 million tonnes by 2015, prompting big suppliers Australia and Brazil to sell more to China and non-traditional exporters to boost shipments.

The burden of producing more to feed China's demand rests on big suppliers Australia and Brazil.

Brazil's Vale and Australia's Rio Tinto and BHP Billiton, which together control around two-thirds of global seaborne supply, are looking to boost their collective output by half to around 1 billion tonnes by 2015.

That will equal China's import demand by then as high production costs and low-quality iron ore reserves boost its purchases, according to estimates from Wood Mackenzie.

"With iron ore prices staying around $180 a tonne, the supply can come from a lot of different sources. If Indian supply continues to disappoint, we will see continued reliance on both traditional and non-traditional suppliers," said Montgomery.

($1 = 45.255 rupees)

Iron ore exports seen falling to 8-year low

18 Jul, 2011, Reuters

MUMBAI: Iron ore exports from India are likely to fall by more than a quarter to their lowest level in eight years because of higher costs and slow efforts in a key state to resume shipments, a Reuters poll showed.

Iron ore sales from the world's third-largest exporter are forecast to fall to 71.25 million tonnes in the current year to next March, from 95 million tonnes in the previous year, according to the median estimate in a Reuters poll of 10 iron ore miners, exporters and analysts.

That would be the lowest export volume since 2003/04 when shipments stood at 62.57 million tonnes.

"More tariffs and higher costs along with outright bans will further limit exports," said an iron ore trader with an international brokerage based in London.

Tight Indian supplies are expected to keep spot iron ore prices <.IO62-CNI=SI> firm, along with strong demand from top steel producer China. Prices of the steelmaking ingredient rose to record highs above $190 a tonne in mid-February.

India's Karnataka state, which accounts for about a quarter of the country's iron ore exports, banned shipments in July last year to curb illegal mining. In April, the Supreme Court ordered the state to resume shipments but, to date, exports have yet to resume with state officials citing technical problems.

Along with the ban, the federal government, in a bid to conserve the raw material for use by local steel producers, raised the export tax on iron ore fines to 20 percent from 5 percent. Indian Railways also hiked freight rates twice this year, making carriage costs five times more expensive than those for ore for local consumption.

"Production has come down and dispatches have also come down and everyone is losing, the railways, ports and the government," said David Pichamuthu, head of the Federation of Indian Minerals and Industry (FIMI) southern region.

Iron ore trade in India is worth about $15 billion a year and the country is the biggest supplier of the raw material after Australia and Brazil . Most of its shipments go to China , which has the world's largest steel industry.

Before the Karnataka ban, India's shipments had been rising steadily from a low of 37.27 million tonnes in 2000/01 to 105.86 million tonnes in 2008/09.

The Indian government estimates iron ore exports of up to 118 million tonnes for the current fiscal year, including government-to-government deals. Excluding those deals, FIMI has said it expects exports to reach 85-90 million tonnes.

Apart from higher taxes and restrictive policies, Indian iron ore exporters also have to contend with limited infrastructure.

Because of relatively small roads in Goa, the biggest exporting state in India, miners are only allowed to move shipments from six in the morning until six in the evening, said Glenn Kalavampara, secretary, Goa Minerals Ore Exporters Association.

Trade officials and miners said there is a greater push to produce pellets, the value added form of ore, after the federal government waived the 15 percent duty on exports.

Several miners have pulled investments together to start building plants to manufacture pellets, which are made by moulding ore powder into the desired castings.

Iron ore exports down 18.60 pc in Feb to 10.13 MT

Wed, 30 March 2011, 1:33 PM

New Delhi, Mar 30 (PTI) Continuing its declining trend for the eighth consecutive month, India''s iron ore exports in February has gone down by 18.60 per cent to 10.13 million tonnes (MT).

The outbound shipment of the vital steel-making raw material during April-February period also declined by 17.98 per cent to 85.43 MT, mainly on account of export ban imposed by Karnataka government.

According to the data compiled by industry body Federation of Indian Mineral Industries (FIMI), the country''s shipment declined by 18.60 per cent in February against the same period last year. Exports were recorded at 12.54 MT in February, 2010.

"The industry has been suffering due to the ban on exports imposed by Karnataka in July. Also, the raise in export duty on iron ore to 20 per cent in the Budget has added salt to the exporters'' injury and its impact will be felt in March exports ," FIMI Secretary General R K Sharma told PTI.

In the Budget, duty on fines was hiked four-fold to 20 per cent while on lumps was upped to 20 per cent from 15 per cent earlier. The country had shipped 117.37 MT of iron ore during the last fiscal.

Also, on account of exports ban imposed by Karnataka shipments declined by 17.98 per cent to 85.43 MT during April-February this fiscal.

In July last year, Karnataka government had slapped the ban in the midst of a controversy generated over illegal mining activities in the state. Karnataka is one of the largest iron ore exporter of the country.

India has been exporting iron ore to China, Japan, South Korea, Europe and other countries.