Exports of Iron ore from India, which had jumped sharply in 2nd quarter (July-September), are likely to plunge in 3rd quarter according to Indian exporters owing to the following reasons:
- Improving Indian rupee against US dollar
- Falling spot iron ore prices in Chinese market
- Implementation of busy season charge by Indian railways (from Oct-Mar)
“Exports have gone up primarily due to weak Rupee and high prices in Chinese market. Margins were good when spot prices of 63% Fe Iron ore was at around USD 136-137/MT CFR China and Rupee was at 65 odd levels.
Now when prices have come down to around USD 132/MT and Rupee is at 62/ US dollar, margins have fallen. Above that, with busy route charges getting effective from 1st Oct, cost will further go up by INR 500-600/MT.
Overall exports will certainly decline in coming months, said an Iron ore exporter based in Eastern region of India.
On the other hand, ban on mining and exports imposed in Goa (in Oct 2012) has also hit overall exports from India. In 2012-2013 Goa alone exported around 7-7.2 million tonnes against a total Indian exports of 18 million tonnes.
According to SteelMint, India exported around 5 MnT of Iron ore in 2nd quarter against 2.5-3 MnT in 1st quarter. India has lost its place in sea-borne Iron ore market since Indian government has tried to reserve Iron ore for domestic use.