A China-led flight to quality in the global iron ore market is punishing producers of the lower-grade material, with miners in India facing an increasing battle to find buyers for their cargoes as demand dwindles.
In Goa, exporters are struggling to sell even a quarter of what they shipped last year, according to Glenn Kalavampara, secretary at the Goa Mineral Ore Exporters’ Association. “There’s absolutely no market,” he said by phone from Panaji, capital of the western state that’s better known for its sparkling beach resorts. “The preference for higher-grade ore is a major concern.” he said.
While Indian exports account for just a fraction of the global seaborne market of about 1.4 billion tons that’s dominated by Vale SA, Rio Tinto Group and BHP Billiton Ltd., the plight of the low-grade shippers highlights the new dynamic.
A concerted anti-pollution push in China this winter has supercharged the premium commanded by higher-grade material, which is more efficient. This week, Rio pointed to “clear evidence” of a structural change in the market, and earlier this year, BHP highlighted the industry’s “new reality”.
“There are hardly any exports,” R.K. Sharma, secretary-general of the Federation of Indian Mineral Industries, said by phone from New Delhi. Sharma has been working in the sector for almost five decades, and at one time saw Indian exports top 100 million tons.
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