Chennai, Aug 10 Strong steel prices in China boosted benchmark spot prices of iron ore from India to around $115 a tonne, including cost and freight, but the offers were for higher-grade ores with 63.5 per cent iron content.
Supply from east coast
According to trade sources, the supply will be made from the eastern coast, where such higher-grade ores are available.
China’s demand for feedstocks has driven up iron ore prices (63.5 per cent iron content) from $58 in April.
A Reuters report quoting the Web site Mysteel said the prices were quoted for future delivery. For immediate delivery, the rates were $131.8 a tonne. When contacted, Mr Glenn Kalvampara, Secretary of the Goa Mineral Ore Exporter’s Association, said though prices were good for ores with higher iron content, activity on the western coast — where Goan companies operated — was limited.
“From Goa, mostly ores with lower iron content and fines are exported. However, trade activity has been restricted due to monsoon,” he said. Prices in July were lower than the corresponding period a year ago. “Indicate prices were $30-60 a tonne depending on the grades. But exports were a little higher than July 2008,” Mr Kalvampara said.
However, he was unable to give the exact export figures for July. “Last July we faced problems of export duty,” he said. Last year, the Government replaced value-based export duty with a flat rate of Rs 200 a tonne.
“Prices have increased slightly in the last one month,” Mr Kalvampara said.
During 2008-09 fiscal, iron ore exports from Goa totalled 45 million tonnes. “It can be termed good, at the most,” he said.
However, Goan exporters do not want to project figures for this year. “It is too early to estimate exports since operations are minimal currently,” Mr Kalvampara said.
A FEW ENQUIRIES
There are a few enquiries from abroad but it does not mean all will be converted into deals. “Having said that, I should also say that shippers are having expansion plans,” he said.
RISE IN FREIGHT RATES
Meanwhile, the Railways has increased the freight charge on iron ores by Rs 200 a tonne. “There are other local issues too such as proposal of cess,” Mr Kalvampara said.
“In fact, the higher royalty we have to pay will offset whatever higher price we may get. But there are signs of revival,” he said.
One of the peculiar problems of Goan exporters is that monsoon reduces their business activities to just nine months.
“Any movement or pickup will be witnessed only during September-October. We will have to see how it takes place,” Mr Kalvampara said.
Source : Business Line