India to Raise Export Duty on Lump Ores to 15% from 10%

India will raise the export duty on iron ores. Indian Minister of Finance, Mr. Pranab Mukherjee, said on April 29, 2010 that the export duty on lump ores would be raised to 15% from previous 10%, while that on ore fines remaining 5%.

After the raise in the export duty on Indian lump ores, there would be some restraint on China's purchase of such ores. However most of iron ores imported by China are ore fines, with the lump ores only accounting for about 12%, so it is estimated that such raise would not produce a big impact on China. India is China's third largest ore supplier following Australia and Brazil. In March 2010, China imported 13.46 million tons of ores from India, up 4.25% year-on-year. The import from January 2010 to March 2010 totaled 33.26 million tons, down 2.4% year-on-year. The statistics totaled for the three months indicate that India has surpassed Brazil into China's second largest supplier of iron ores.

Recently, under the influence of China's adjustment of steel market, the spot price of ores has fallen slightly back to around USD 185 per ton (CFR) from a previous high at about USD 192 per ton (CFR). Nevertheless, most of traders remain confident in the after market, for the ore supply will become further strained as the rainy season approaches in India, with the spot price likely to go up again.