Indian Domestic Demand Halves Iron Ore Exports

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Aug. 22 – India’s iron ore exports fell for the first time last year and have further declined as a result of massive domestic demand. A government policy of promoting nationalism in resources is driving down India’s exports of the commodity and is helping to reduce international prices. To assist with getting enough ore into domestic redevelopment projects, India has raised freight rates and tariffs, including a quadrupling of export taxes for iron ore over the past 12 months. Exports have responded by declining 17 percent.

India is the world’s fifth largest steel producer, however it is increasingly making demands for its own domestic needs as opposed to just exporting its raw commodities. India’s domestic steel sector is booming, as is the construction industry, while exports of iron ore are expected to drop to 47 million tons by 2016, down from 98 million tons this year.

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