India: Ore exports on shaky ground - Metals News - Metals Place
At present, the bench mark price for a long-term lease is $60 a tonne (for high grade iron ore – containing 64 per cent ferrous content). Indian iron ore commands the highest price in the spot market at $120 a tonne (average).
The price in the spot iron ore had reached a record high of $180 a tonne last year when shipments from Australia and China were delayed on account of port congestion and inclement weather.
However, in the last one month alone, the price of Indian ore in the spot market has dipped to $90 a tonne as shipments from Australia returned to normalcy.
“We have been informed that Chinese mills are keen on raising the price of iron ore (long-term lease) to $75 a tonne in favour of Australia and Brazil. In that case, very little iron ore will trade in the spot market. Besides, if Australia and Brazil maintain dedicated supply of iron ore, the demand for Indian iron ore will come down automatically,” Basant Poddar, senior committee member, Federation of Indian Mineral Industries (FIMI), said.
According to the Australian Bureau of Agricultural and Resource Economics (ABARE), in 2006-07, Australia exported 269 million tonnes of which 50 per cent was consumed by Chinese mills. Similarly, Brazil exported 268 million tonnes. In 2007-08, Australia’s exports are expected to grow 13.4 per cent while Brazil’s exports are set to rise 14.5 per cent.
“On the contrary, our exports have always been around 90 mt per annum. We have been struggling to touch even the 100 mt-mark. We will lose market share very badly if the prices of iron ore in spot market and long term lease even out,” Poddar said.
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