BANGALORE: The Karnataka government’s ban on iron ore exports is going to benefit Orissa, Jharkhand and Goa. “It’s our loss and gain for the other three states. Goa, notably, stands to benefit because there are no logistic bottlenecks. We expect Goan mines to ramp up supplies over the next two to three weeks,” says Basant Poddar, MD of Mineral Enterprises, one of the miners hit by the ban.
Mineral-rich states like Goa and Karnataka are the major contributors to India’s annual export of about 120 million tonne of which 75% is procured by Chinese steel mills. Mr Poddar’s frustration comes at a time when global iron ore spot prices have rallied by over $15 per tonne in the last three weeks on the back of lower shipments from India due to monsoons and the Karnataka export ban. Global iron ore spot prices, which were ruling in the range of $145-150 per tonne around the third week of July, have since rallied to as much as $165-170 per tonne. Global spot and future prices were ruling at around $130 per tonne about two months ago. “We are talking of nearly 2.5-3 million tonne of iron ore still lying within the state (Karnataka) which has still not been shipped,” says Mr Mohan Raghavan, MD of SSTA Logistics. The mineral-rich Hospet-Bellary belt accounts for over a half of Karnataka’s 40 million tonne iron ore annual production. Of the 40 million tonne produced, 75% is exported, mostly to China. China, which has an annual consumption of close to a billion tonne of iron ore, sources close to 80% of its requirement from Brazil and Australia with India accounting for the balance. Mr Raghavan says that while India may only account for 20% of China’s imports, the fact that it transacts on a “spot basis” has an influence on the long-term pricing model adopted by Brazil and Australia. While prices have shown an uptick in the short term, traders and analysts say worries continue to persist. “The one bright spot of economic data has been Germany while both US and China are points of worry. Events in the second half of the calendar year will determine how global iron ore prices move in the medium term,” points out Mr Anand James, chief analyst with Geojit Comtrade. In fact, customs data showed on Monday that China’s imports of iron ore from India plummeted for a second straight month, falling 21% in July to 6.5 million tonnes with monsoons disrupting transport. The shortfall was offset by shipments from elsewhere, with Australian ores rising 10% month on month to 23 million tonnes, and Brazilian ores up 22% to 10 million tonnes. Australia, Brazil and India delivered 78% of China’s total imports over the month, down from 80% in June. http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals--mining/Karnataka-iron-ore-ban-to-help-Goa-and-Orissa/articleshow/6423268.cms * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Goa-launch of the well-received *Into The Diaspora Wilderness* by Selma Carvalho on Aug 29, 2010 (Sunday) at 11 am at Ravindra Bhavan, Margao. Meet the author, buy a signed copy (only Rs 295 in Goa till stock lasts). http://selmacarvalho.squarespace.com/
