India Steel Market Watch
November 23: India’s mines ministry is mulling plans to withdraw an export tax of 10% on lower-grade iron ore, aimed at helping miners in Goa attract customers amidst a broad plunge in commodities prices this year.
The ministry will propose removing the duty on fines, or granules, with an iron content of below 58% to the finance ministry ahead of the Budget, sources said.
The ministries will also discuss raising import taxes on copper and aluminum in the Budget, which is due around the end of February, sources said.
Scrapping the export tax would boost profitability at Vedanta Ltd, which resumed exports from Goa in October after a mining ban was lifted in the state just as global prices slumped due to the economic slowdown in China, the world’s biggest buyer.
Additional shipments from India, once the world’s third-biggest iron ore exporter, would only add pressure to the global market for iron ore, the main feedstock for steel. The government of Goa, previously the biggest shipper of low-grade ore from India, shut its mines in September 2012 after a probe found that mining had contaminated ground water. The ban was lifted last year, with an annual cap of 20 million tons on output.
Ore with 62% content delivered to Qingdao in China dropped 2% to $45 a dry ton. China’s import growth is slowing as steel mills cut production, albeit from record levels, in the face of an unprecedented glut of the metal.