Brazil?s loss is India?s gain. Steel makers in China have turned to India following an increase of about 100% in freight on board (FOB) prices from Brazil over the last one year.
The China-Brazil freight rates have gone up to over $70 per tonne as compared to $35-40 in January. In comparision, freights rates from India are around $35 per tonne. As a result, high-grade iron ore from India is fetching as much as $108 per tonne in China.
The movement of iron ore prices released by the China Chamber of Commerce of Metals Minerals and Chemicals Importers and Exporters (CCCMC) are average prices for import transactions of iron ore with 63.5% Fe content.
Even as the prices of high-grade iron ore have gone up in India during the last six months, China is increasingly looking across the border for the raw material. Since the autumn period starting September is a busy time for the Chinese steel makers, the demand for iron ore would continue to be strong for some time, experts say adding the dip in iron ore export from India (in the recent past) would be taken care of by the jump in international spot iron ore prices.
The domestic mining industry, however, believes that the advantage would not be there on a long-term basis. Earlier, Federation of Indian Mineral Industries president Rahul Baldota had said the total iron ore exports from the country would witness a 15% dip owing to the export duty on the raw material.
Iron ore sales had fallen after the government imposed a duty of Rs 300 per tonne on exports in the February 2007 budget. It later cut that to Rs 50 for low-grade ores below 62% iron content following protests from the mining industry.