Iron Ore Exports Down 28 In July (22-Aug-2010)
Iron ore exports from the country have witnessed a decline of nearly 28% in last month as demand from China slows and high export duty eats into exporters’ returns. India managed to export around 4.74 million tonne of the crucial raw material for making steel in July 2010 compared with a figure of 6.1 million tonne in the same month a year ago.
As per the data compiled by the Federation of Indian Mineral Industries (FIMI), cumulative iron ore exports in the April-July period this year however remained marginally in the green so far. India exported 32.86 million tonne of iron ore in first four months of this fiscal against a figure of 31.39 million tonne exported in the corresponding period last fiscal.
According to industry insiders, China, the main importer of Indian iron ore, has seen a significant slowdown in metal market in recent months. While some of the reasons are temporary like the monsoon rains, others, like government’s curb on property market to prevent overheating of the economy can have a more prolonged impact on the Chinese demand.
Another reason for decline in iron ore exports is a ban by the Karnataka government which wants to curb the illegal mining in the state. The central government has formed a committee which will look into various issues relating to illegal mining and submit a report within six months. However, industry experts argue that legal exports bear the negative impact of steps like banning the exports.
The FIMI also contends that if the Karnataka government does not lift the ban soon, there will be much sharper decline in exports in coming months. The industry apprehends that even if only some of the exporters are not able to fulfill the contracts entreated into with the Chinese buyers, it will hit the prospects of the whole industry and also hurt India’s reputation as a credible trading partner.
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