Indian export offers for high grade iron ore fines (with Fe content of 63.5 percent and higher) have generally moved sideways in the past week at around $63-64/mt CFR China, while exporters have withdrawn from the market disappointed with the Indian government's decision to maintain the export tax unchanged, traders said on Tuesday, March 3.
According to an Orissa-based miner-exporter, the strong expectations in the market that the government would reduce or cancel the export duty on iron ore shipments were disappointed. With the export duty maintained at 30 percent, market participants are now talking of a death knell for ore exports from the country.
The trader also said that, at current offer levels, there is no logic in concluding transactions even for low volumes. "The increase in railway freight charges and the hike in petrol and diesel prices have made export transactions even more uneconomical," he added.
Sources said that mid-week gains of about $1/mt in offers were more of a reflection of the strengthening of the global futures market, only to be wiped off as higher levels led to the cancellation of small transaction volumes too.
Leading traders have said that Indian offers could now slump below the $60/mt mark in absence of any support from Chinese traders and such levels would further push the export industry towards the edge.