Growth in iron ore cargo volumes shipped through major ports including the intermediate steel product pellets, narrowed sharply to 1.36 per cent at the end of December 2017. Total iron cargo in April-December 2017 stood at 33.4 million tonnes, almost flat compared to 33.01 million tonnes in the same period of FY17. This is a departure from the trend observed in April-September of FY17. Till September, iron ore traffic was the key driver at major loading ports such as Paradip, Visakhapatnam and Mormugao. Growth in iron ore shipments, inclusive of pellets through major ports was 23 per cent. Major beneficiaries from the spike in iron ore cargo were the ports of Paradip, Kandla, New Mormugao and New Mangalore. As exports of iron ore, especially from major producing states like Odisha were on an uptrend, this strengthened cargo growth. Besides exports, domestic movement of iron ore from ports to the hinterland also got a fillip due to buoyant demand for the commodity. However, since then the iron cargo trend is reversing. A mining industry source said, exports from Goa are lacklustre as demand from China for low grade iron ore has waned. As China cracks down on its industries to tackle heightened pollution, steel industries there have been more inclined to source higher grade iron ore. The downtrend is amply reflected in Mormugao’s cargo numbers, especially iron ore during April-December.
During this period, iron ore traffic crashed 38 per cent to 5.7 million tonnes from 9.3 million tonnes in the year-ago period, according to data by the Indian Ports’ Association. The share of iron ore to the port’s total cargo is more than 30 per cent. Mormugao port ships mostly low grade ore (ferrous content below 58 per cent) produced by Goa’s mines. The government has waived off export duty for this low grade ore which hardly has any domestic demand. For New Mangalore port too, iron ore traffic was flat. Iron ore cargo for other key loading ports like Kolkata, Visakhaptnam and Paradip was positive for the period. FY17 had proven to be a major comeback year for iron ore as the commodity surged 163 per cent in volumes shipped by major ports. It was largely on the strength of iron ore traffic that Mormugao port registered the highest growth of 59.7 per cent among all major ports in FY17. Waiver of 30 per cent export duty on low grade iron ore fines and lumps (with iron content less than 62 per cent) chiefly from Goa buoyed export bound iron ore cargo from the port. The ports on the eastern sector- Paradip and Visakhapatnam were the other big gainers from revival in iron ore cargo. The outlook for iron ore movement, both exports and hinterland bound traffic is depressing for the January-March period. Closure of seven working mines in Odisha with a combined annual capacity of 20 million tonnes will hurt traffic. Also, according to projections by Federation of Indian Mineral Industries (Fimi), exports are expected to be slower compared to last fiscal as higher grade iron ore (ferrous content above 58 per cent) is still taxed at 30 per cent.
Source: Business StandardPrevious Next