Find the iron ore price table for February 28, 2013 below:
The big news overnight was that India iron ore continues its path of self-destruction. First, exports have now collapsed to about 20 million tonnes er annum (from 100 in 2010):
India’s iron ore exports in the 10-month period of April to January of the current fiscal year has declined by 68% to 16.35 million tonnes (mt) from a year earlier, data from the Federation of Indian Mineral Industries (FIMI) showed on Wednesday.
And Platts reports that the Indian budget did nothing about the punitive export tarrifs:
Indian iron ore export tariffs will remain unchanged in the coming financial year, finance minister P Chidambaram said Thursday in his presentation of the Union Budget for the April 2013-March 2014 fiscal year.
But industry and market participants said there was general expectation of a reduction in ore export tariffs ahead of India’s general elections scheduled for early 2014.
India has been levying a 30% export duty on exports of iron ore fines and lumps since December 2011, while pellets are exempt from export tariffs.
However, the story did go on to say that a significant reduction may be scheduled for early 2014:
Industry bodies such as the Federation of Indian Mineral Industries (FIMI) had called for ore export tariffs to be reduced ahead of Thursday’s budget announcement, but had little expectation of success given mining bans and ongoing investigations into mining operations in various states.
The downtrend in Indian iron ore export volumes in recent years, among other factors, has been adding to India’s current account deficit woes.
Sources said New Delhi might therefore pare ore export tariffs either when it unveils the nation’s foreign trade policy in March, or later in the year as a populist measure ahead of the 2014 elections.
“Just before the elections, we could see (iron ore) export duties come tumbling down to 15% or so,” an Odisha-based iron ore miner told Platts, adding that lower ore export volumes had also been hurting rail freight revenues.
India’s railway budget unveiled Tuesday estimated earnings of Rupee 10.84 billion ($199 million) during the 2013-14 fiscal year from transport of 4 million mt of iron ore for export.
This is down from Rupee 25.85 billion earned in fiscal year 2011-12 from transport of 9.67 million mt of iron ore for export, budget documents showed.
There are still the state based bans of mining to contend with. and it’s difficult to judge whether this is just hopium. But the fallout from the crazy decision to ban exports seems to be spreading. It would be very bad timing indeed for India to re-renter the market in any substance in 2014. That’s immediately after FMG’s Kings development comes on stream with a new 100 million tonnes.
If any announcement does come, expect spot to take a lot of heat.
