Business Standard reported that iron ore exports jumped 13% in the H1 of the current financial year due to a sudden spurt in Chinese off take as steel mills build their inventory.
According to date compiled by the Federation of Indian Mineral Industries the total shipment was recorded at 45.03 million tonnes in the H1 ended September compared to 39.78 million tonnes in the corresponding period of 2008. Exports during September, however, shot up sharply by 88% as steel mills in China, the world’s largest ferrous metal producer intensified building of inventories from various sources.
Mr SBS Chouhan advisor of FIMI said that “The Chinese demand has resumed after the monsoon. It’s good that mining companies were shipping iron ore not consumed by domestic steel mills. However, Indian ore exports are facing huge price resistance as trades are executed mainly on the spot basis. Since, China has not yet signed long term supply contracts with global miners including Rio Tinto, Vale and BHP, steel mills there are fed mainly on short term supply basis and India is gaining a major share of the Chinese market.”
He said that Chinese steel mills are technologically advanced to convert low grade iron ore into high grades and, hence, they face no problem in using imported ore from India.
Source : Business Standard