NEW DELHI, May 23 (Reuters) - The increase in export taxes
on iron ore, announced by the Indian government over the
weekend, will lead to large surpluses at home, and mainly hit
producers of low grade ores that depend on overseas markets, a
mining industry body said on Monday.
On Saturday, the government announced that with effect from
Sunday export tariffs on new iron ores and concentrates would be
raised to 50% from 30%, and duties on pellets would be hiked to
45% from zero. The government also removed import tariffs for
coking coal and coke.
Benchmark iron ore futures in China - the world's top
consumer of the ore - rose about 7% in early trade on Monday,
tracking their biggest daily jump in two-and-a-half months, as
India is one of their major non-mainstream iron ore suppliers.
"This is self-defeating, actually, because there will be a
lot of stockpiling," R.K. Sharma, secretary-general of the
Federation of Indian Mineral Industries (FIMI), said, adding
that exports to China were also declining because of low grade
quality of Indian ore.
Production by global miners, including BHP, Rio
Tinto and Fortescue Metals Group in Australia,
has been disrupted by supply-chain snags and pandemic-induced
labour shortages, while Brazil's Vale has also had to weather
STEEL EXPORT OUTLOOK DIMS
India, South Asia's third-largest economy, also raised
export tax by 15% on eight steel intermediates and scrapped
import duty on coking coal, shortages of which have been driving
up steel prices.
India's top steelmakers body warned on Monday the new export
duty on steel products will "adversely impact" mills that have
been aiming to boost exports and widen global market share
following Russia's invasion of Ukraine.
The world's second-largest crude steel producer churned out
a record 120 million tonnes in the fiscal year that
ended in March.
"The latest policy will dampen fresh investments," Dilip
Oommen, chief executive officer of ArcelorMittal Nippon Steel
India Ltd and president of the Indian
Steel Association, told Reuters.
AM/NS India - a joint venture between ArcelorMittal
and Nippon Steel - believes that the decision to raise
the steel export tax would hit the company's 90,000 tonnes of
steel exports every month, Oommen said.
Separately, Kaustubh Chaubal, vice-president of corporate
finance group, Moody's Investors Service, said the export duty
increase would raise costs for domestic steel mills.
(Reporting by Neha Arora in New Delhi and Rupam Jain in Mumbai;
Editing by Mayank Bhardwaj, Simon Cameron-Moore, Kirsten