From the Business Standard today:
Rise in the prices of iron ore in international markets and depreciating rupee has prompted a many exporters to begin export of iron ore fines and pellets. A bunch of exporters have booked five shipments of pellets for September delivery to buyers in China as the prices have moved up 10.5% to $136 per tonne.
“The exporters were holding on to their stocks for a month in anticipation of export duty reduction by the government. As the prices have improved overseas they have started booking exports to take the benefit. The rupee depreciation has also encouraged them to start exports of fines and pellets,” said Prakash Duvvuri, head of research at mining and metal information website Ore Team.
Nearly half a dozen exporters have booked export consignments from Paradip and Vizag ports on eastern coast for September delivery to Chinese buyers. According to reports five ships with 50,000 tonnes of pellets each are being shipped.
As of end July and early August, the exporters were holding on to their stocks in anticipation that government will reduce duty on exports to 15-20% from 30%.
Between April and July 2013, the country has exported 3.92 million tonnes of iron ore (provisional) as against 13.4 million tonnes in the corresponding period, showing a decline of 240%, he said.
Duvvuri said the rupee depreciation might encourage more exporters to look for shipments overseas this year. An average of at least one million tonnes of iron ore fines per month could be exported this year. Also, the rise in pellet prices has prompted Indian producers to look for exports of pellets this year. In the recent days, the prices of pellets have improved from Rs 6,200 per tonne a month ago to Rs 6,700 per tonne currently, showing a rise of 8%, he said.
As I said earlier this week, Indian sourced supply has collapsed in the past few weeks in China. Now we know why.
I don’t expect a strong surge here. But I do expect the duty to be cut and other measures taken to push a resumption of ore export growth. It’ll take time but will grow, perhaps in time to exacerbate next year’s supply deluge.
