July 29, 2010: Iron ore exporters are increasingly looking at the domestic market as demand for the ore witnessed decline on the back of sluggish demand from China, one of the major buyers of Indian ore.
The recent controversy over illegal mining in some of the major states of the country and lack of clarity over export tax on the commodity added to this trend as miners played safe by entering into supply contracts with domestic manufacturer than relying on exports. Iron ore prices plunged since April amid concern of slow global recovery and a switch from annual to quarterly contracts of iron ore in recent time. Spot iron ore prices in Asian market after ruling high at $185/ton also dropped to around $140/ton on the back of sluggish Chinese demand. This trend has its reflection as iron ore exports from the country declined by 15% to 20.8 mt during April-June period of current financial year from 24.5 mt a year earlier. Further, recent controversy over illegal mining and steel ministry's proposal to levy higher tax on iron ore has also negatively impacted export scenario from the country. Source: Business Standard