This is the most crucial time for the iron ore exporters from Goa, as they may face threatening tasks in future for the shipment of newly purchased steelmaking raw material through online auctions. This is because the Chinese has recently passed a new environment law, which may also affect the sales of iron ore through online auctions in Goa.
In the last month, the state government of Goa has conducted two auctions in order to dispose little over two million tons of iron ore of the total unsold inventory, which was around 11.5 million tons and the auction for the remaining quantity will be scheduled shortly.
The President of Goa Mineral Ore Exporters Association (GMOEA), Shivanand V Salgaokar said, “Exporters have been facing problems already for non-receipt of durance certificates from the state government which they expect to get by the end of this month.
They are still awaiting exports certificates from the state government without which exporters cannot start export process.”
As the first round of the auction for 5.45 lakh tones was conducted on February 17 and the iron ore is declining by 13%, which is $126 to $100 a ton. On the fall of the price of the iron ore, Salgaokar said, “Iron ore exports are going to make loss with fall in overseas prices. But, they can hold the quantity of the markets to take a favorable turn. Unlike steel mills that purchase raw material for own consumption, traders and exporters can wait for executing any orders until market sentiment improves. This is the difference between a manufacturing company and a trading unit.”
It is uncompetitive in foreign markets because Indian iron ore exporters have to pay high export duty that is of 30%. Moreover, the government of China has put strict environment policy, which restricts the steel mills of China to purchase cheap iron ore from anywhere in the world, including India.
This will directly affect the purchase of the iron ore of the country and will lead to huge loss. It will also restrict the foreign currency that usually comes from China in the exchange of iron ore and directly will affect the national income of the country. As the price of iron is falling from $ 126 to $ 100 per ton, this will directly affect the exporters from Goa and will lead to less iron ore sales.