India iron ore sales to China to slow down

Beijing, Apr 24: Iron ore exports to China from India were likely to halve in April compared with a record March, traders said, as an Indian export tax temporarily slows liftings.

China, the world's largest steel producer, imported a record 9.84 million tonnes of iron ore from India in March, despite the introduction of a 300 rupee per tonne export tax announced early in the month. Most of the shipments were contracted before the tax was announced.

Chinese mills and traders have said they would halt buying from India, but merchants based in Singapore and Dubai said sales of Indian ore were continuing, albeit at a lower level.

''The Chinese are buying, but it might drop to about 4 million tonnes in April. Maybe in May, it could recover to about 6 million,'' said Amit Jejani, trading manager for Swiss Singapore Trading Co. in Shanghai.

Congestion at Australian ports favoured Chinese purchases from Brazil, which rose 30 percent on the year in March, and from India, which rose 31 percent from a year earlier.

''We are still buying from India, but it could cool down a lot because of this,'' said Liu Zhonglong, head of Tianjin-based trading firm Zelong Shiye, which imports about 2 million tonnes of iron ore a year from India.

China imported a total of 36 million tonnes of iron ore in March, bringing the total for the first quarter to 100 million tonnes, or about one third its total import volume in 2006.

''March imports of iron ore were high, thanks to the low stockpiles in steel mills, especially in southern China, which have been urgently producing products to export,'' said a trader at a private merchant in Shanghai.

Reuters>