The Hindu Business Line : Iron ore offtake may drop 10-15% due to China’s import curbs

Bangalore, June 6 The Federation of Indian Mineral Industries (FIMI) envisages a slowdown in China’s import of iron ore, partly due to constraints from domestic factors like increase in rail freight rate and restriction by ports in handling ore.

The federation said the trade was already feeling the signs with the offtake tapering off. It said the export of ore from India could drop by 10-15 per cent a year with China resorting to indirect import restriction because of completion of its infrastructure projects, including those for the mega sporting event, the Beijing Olympics. The Games is to start from August.

Addressing a press conference here, Mr D.V. Pichamuthu, Director (Southern Region), FIMI, said the railway freight rates have gone up by 45 per cent and coupled with the shortage of rakes, exporters were feeling the pinch of the slowdown with prices also going down.

Landed price of ore, which used was $180-200 a tonne last year, has come down for the lower grade ore to $130. The demand for iron ore fines has virtually become negative. India exported 90 million tonnes of iron ore during 2006.

Mr Pichamuthu said FIMI was against export restriction on iron ore. Stating there was no shortage of ore for domestic steel makers, he said even leading steel companies with captive mines produce in excess of their requirement and export ore.

He said the steel companies had no reason to demand a restriction on exports. Also, he added, it was only the low grade ore that was being exported and that the steel makers do not use this material.

FIMI demanded early amendments to the Mines and Minerals (Development and Regulation) Act to give effect to the provisions of the New Mineral Policy to attract more investments in the sector.

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