Iron ore traffic, including pellets, at major ports saw a sharp fall of 28 per cent in financial year 2015-16 as imports declined because of weak demand. Total iron ore cargo fell to 13 million tonnes (mt) from 18 mt a year ago.
Iron ore imports fell from 15.6 mt to 5 mt in 2015-16 because of oversupply in domestic market. There was hardly any export of iron ore as steep export duty prevailed throughout the FY16. Export duty waiver for low grade ore has been announced in Budget for FY17.
The slump in iron ore traffic weighed on cargo throughput of eastern ports. In case of Paradip Port, iron ore cargo nosedived from 3.4 mt to 0.2 mt year-on-year. Iron ore traffic at Visakhapatnam fell from 8.36 mt to 5.97 mt.
India produced 155 mt iron ore in FY16, compared with 129 mt in FY15. Odisha, largest ore producer state, saw the sharpest jump from 47 mt to 81 mt y-o-y.
With rising production, dull despatch is a worrying trend for the miners. Lacklustre demand from steel industries, pellet makers and other end-use industries has scaled up iron stocks states like Odisha, Jharkhand and Goa.
Domestic demand from steel, sponge iron and pellet industries is not adequate to absorb the production, resulting in continuous addition to stockpile of iron ore, year after year. Federation of Indian Mineral Industries (Fimi) fears that with the shrinking domestic demand, mining industry in future may be forced to go for production cut, leading to job losses.
Fimi has pressed for removal of export duty on all grades of iron ore as this would help clear the piling inventory.
Source: Business StandardPrevious Next