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Indian ore export tax may boost Australian sales

Indian ore export tax may boost Australian sales

Sydney: Dry bulk analysts are predicting an increase in Australian iron ore exports as a result of the recent Rs300 ($7.6) per tonne tax imposed by the Indian government on all  shipments. The move, aimed at conserving domestic supplies of the ore for Indian steel makers, is expected to halve export levels by mid-2008.

In particular, the move is likely to decrease demand on dry bulk shipments from India to China, with Chinese imports being supplemented from Australian sources such as BHP Billiton and Rio Tinto. While port congestion commonly seen at Australian ports may impact the amount of ore imported from this country and lead importers to source the cargoes from Brazilian importers, the lesser distance from Australia as compared to the South American nation makes the former a more practical source. Australian iron ore currently costs approximately $15-20 less than ore from India or Brazil.

A number of Indian exporters have already reported a decrease in orders that is expected manifest itself along trade routes from alternative suppliers in the near future. [08/10/07]