The Hindu Business Line : Iron ore traffic in major ports up 9%

Chennai, Oct. 17 Iron ore traffic through the country’s major ports increased by nearly 9 per cent, despite rupee appreciation and the Rs 300-a-tonne export tax on the commodity.

India exported 39.40 million tonnes (mt) of the ore during the first half of the current fiscal, compared with 36.20 mt handled in the corresponding period last year.

The increase in traffic was despite the Rs 300-a-tonne export tax — the tax was reduced to Rs 50 a tonne for ores up to 62 per cent iron content — announced in the Budget; rupee appreciation against the US dollar in the last few months and the shortage of bulk carriers, sources said.

Surpasses target

The major ports also surpassed the iron ore traffic target of 37.73 mt set by the Shipping Ministry for the first six months, according to the Indian Ports Association data.

Nearly 95 per cent of iron ore handled at Indian ports is exported to countries such as China and Japan, and the rest is for local consumption, said sources.

China demand

Mr Moosa Raza, President, Indian Steel Alliance, said the increase in traffic was due to the Chinese demand for iron ore. Around 80 per cent India’s iron ore is exported to China, which annually imports around 500 million of the ore from various countries.

“We will have a bull run as long as the Chinese demand is there. China’s steel production does not seem to be reducing. This is despite the price of iron ore touching a record high of $105 a tonne three months ago. The price has dropped by $5 a tonne now,” he told Business Line.

Mr Rahul Baldota, President, Federation of Indian Mineral Industries, however, said iron ore traffic was affected due to drop in imports by China.

Quoting the Web site mysteel.com, which tracks the Chinese steel industry, Mr Baldota said China’s iron ore import dropped by nearly 25 per cent. “This should have a significant effect on Indian iron ore exports,” he said.