Indian export offers for high grade iron ore fines with 62 percent iron content and above have increased by $10/mt, reaching $112/mt CFR China, on higher inquiry volume coming from Chinese mills. However booking volumes have remained low, with traders and miners holding onto to stocks in anticipation of further rise in prices, traders said on Thursday, September 20.
"Higher offer prices during the week show that replenishments of Chinese mills are gaining momentum," a trader in western Indian province of Goa said.
"But miners and traders have been holding onto their existing stocks at pitheads or port stockyards, waiting for export prices to move up further. Following the ban on mining operations in Goa, supply of iron ore fines have dried up completely and miners seek to leverage their existing stocks to the maximum and this has caused lower booking volumes," the trader added.
India's Ministry of Mines has decided to recommend a reduction in iron ore export tax, which is currently at 30 percent to facilitate faster reduction in stockpiles of iron ore fines available at miners like NMDC Limited and Sesa Goa.
"However, a section within the Ministry feels that existing stockpiles of iron ore should be seized and liquidated by the government since these dumps resulted from irregular and illegal mining for which mining operations had been suspended in the first place," a Ministry official said.
According to a trader in Orissa, a correction in iron ore fines export price is a matter of time, since the gains of the week would not be sustained by assured supplies to buyers.