INTERFAX-CHINA reported that Indian government's scrapping of an 8% export tax on iron ore fine may not bring down spot iron ore prices at Chinese ports immediately, but it will benefit Chinese steel mills in the long run.
Mr Yu Liangui an analyst with Mysteel Information said that "The Indian government's move will not trigger immediate and aggressive increases in China's imports, as traders are now more careful when importing ore, given that the outlook for China's steel industry next year is still uncertain. Thus, spot prices at Chinese ports are expected to remain relatively stable in the short term.”
Mr Li Jingkang an analyst with Capital Futures also said that "Instead, it will give relief to Indian iron ore exporters, and make Indian ore more competitive. I believe this will strengthen China's position at 2009 annual iron ore benchmark price talks.”
Mr Yu further added that "However, the tax scrap indicates that India is also under great economic pressure and does not want to lose its market share in China, when China's ore demand is sliding. The move will give room for domestic spot iron ore prices to further slide, which will benefit Chinese steel mills in the long term.”
I Indian government announcement of withdrawn its former 8% export duty on iron ore fine and reduced its export duty on iron ore lump from the previous 15% to 5% in line with measures outlined in the country's economic stimulus package.
Source : Steelguru