India's 2007 iron ore exports may fall 15 pct

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Oct 2007

India's iron ore exports could fall by 15 percent this year due to handling problems in two key ports, an industry official said, adding to a squeeze on world supplies that has propelled spot prices to record highs.Snags with loading equipment in Mormugao in western India and an ore handling plant in Paradip port in the east of the country have cut about 1.0 to 1.5 million tonnes a month from exports, Rahul Baldota, president of the Federation of Indian Mineral Industries, said.The world's third-largest supplier of the main raw material for steel making ships out 10 to 12 million tonnes of iron ore monthly in the peak season between October and March.''There could be a 15 to 20 percent fall in exports this year mainly because of the port problem,'' Baldota said.Indian iron ore traded last week at $185 a tonne delivered in the world’s biggest buyer, China, versus $160-$170 for Brazilian material and under $100 for Australian term prices.A global shortage of ships has pushed up freight rates, giving India a temporary advantage over rival Brazil for sales to China.''India is not able to really take advantage because of the port situation,'' Baldota said. ''The situation in Paradip has eased but Goa will take some time.''Industry officials said that the port situation in Mormugao -- which accounts for about 30 percent of India's iron ore exports -- was not likely to be resolved for at least one month.One of the two shiploaders in the port has been out of action since July.Exports from Goa, which accounts for 40 percent of India's iron ore overseas sales, fell by 15 percent between April and September to 10 million tonnes from the same period last year, according to Goa Mineral Ore Exporters Association.Major exporters from Goa include Sesa Goa Ltd, Dempo group and Salgaocar group.National figures for the same period were yet to be compiled.The country exported 90 million tonnes of iron ore in all 2006, mostly to China.Baldota added that costs were rising due to higher railway freight charges over the past year, while the strengthening rupee and export duties were also cutting into revenues.''Our costs have gone up drastically,'' he said.The rupee hit its highest level since March 1998 at 39.27 to the dollar this month. India had also imposed a duty of 300 rupees per tonne on iron ore exports in February, which was later cut to 50 rupees for low grade ores below 62 percent iron content.