Find below the iron ore price table for August 29, 2013:
Rebar futures were spanked as well so paper markets were clearly spooked by the general environment. If it continues it will hit real prices before long.
In news, it’s again all about India. From Reuters:
India is likely to drop the duty on iron ore exports to 20 percent from 30 percent, government officials said, as Asia’s third-largest economy exhausts ways to boost foreign currency inflows and arrest a steep fall in the rupee, which is hammered to new lows nearly everyday.
If that goes ahead, India’s annual iron ore exports may rise to almost 20 million tonnes, even if mining remains banned in Goa and parts of Karnataka, said H.C. Daga, president of the Federation of Indian Mineral Industries.
…”Once an international buyer gets an indication that the worst is over in terms of policy, more orders will happen.”
Bulk of the exports may come from Odisha, India’s eastern state that is the biggest producer of iron ore and whose output is forecast at 65 million tonnes for the current fiscal year.
…From about 1.5 million tonnes in July, iron ore exports from Odisha could rise to 2 million tonnes a month, or at an annualised rate of 24 million tonnes, estimates Gunjan Aggarwal, senior consultant at CRU in Mumbai.
At current global iron ore prices of around $120 a tonne, free on board, for the benchmark 62 percent grade .IO62-CNI=SI, exports fetch 2,600 rupees excluding the 20 percent duty and the railway freight cost, higher than the domestic selling price of around 2,200 rupees, said Aggarwal.
Goa, which produces mostly low-grade iron ore fines, exported nearly all of its annual output of more than 43 million tonnes before mining was banned. Karnataka exported about 25 million tonnes a year before the curbs were implemented.
An export tax cut would suggest the Indian government is bent on reviving exports after efforts in the past three years to keep more iron ore at home to boost its steel industry.
“Now that they’re talking about a 10 percent cut in duty means that they are changing their thinking given the tough times that we’re seeing,” said CRU’s Aggarwal.
20 or 25 million tonnes will not upset the market balance. But as Karnataka and Goa return progressively over time it will.
