Iron Ore export slump may impact Indian cargo growth: ICRA


Cargo growth of Indian ports are likely remain subdued in the medium term owing to the uncertainties in certain categories like imported coal and containers, according to rating firm ICRA.

“The near to medium term outlook remains subdued as uncertainty may be associated with particular cargo categories like imported coal, due to uncertainties plaguing the power sector and persisting delays in execution of Greenfield power projects; and containers, due to the relatively weak global environment a ffecting exim trade,” ICRA stated in its latest report. Further, despite the lifting of mining ban in key states, iron ore export volumes are also expected to be modest over the near term at least. 

The export contract of NMDC, elimination of export duty on low grade iron ore and restarting of mining operations in Goa (which could have surplus production of low grade iron ore for exports once mining operations resume in full flow) should support export volumes to some extent. However, the prevalent overall export volumes would continue to be weighed down by high export duty of 30% on higher grade of iron ore as well as low prices.

Over the medium to long term, the outlook for cargo growth continues to be strong, driven by domestic requirements of coal for power and other sectors; crude oil, for meeting domestic petroleum requirements; and containers, given the cost and logistical advantages associated with containerisation.

Source: Commodity Online

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