iron ore spot price to go to us$200/ton

The Indian Gov't is trying to cut back exports of IO to China. The Indian economy is growing quickly and they need to preserve IO for their own infrastructure.
My call is that the IO spot price will go above US$200/ton CIF in the next few weeks.
Lets hope that TTY is digging and delivering at an accelerated rate during the next quarter.


NEW DELHI -- India is likely to increase an export tax on iron ore lumps to discourage overseas shipments and preserve the raw material for local steel mills, which have lined up expansion plans.

"The tax structure on iron ore exports was discussed between different ministries today (Thursday). We understand that the tax on iron ore lumps may go up," federal Steel Secretary Atul Chaturvedi told reporters after a meeting with steelmakers. A decision on increasing the export tax may come as early as Friday, he said.

The South Asian nation is the world's third-largest iron ore supplier and exports nearly half of its total output. The country is also the world's fifth-largest steel producer and the federal steel ministry as well as local manufacturers of the alloy want to curb ore exports to ensure adequate supplies for their expansion projects. India has an installed steel production capacity of 72 million tons and plans to raise capacity to 115 million tons by Dec. 31, 2012.

The federal government currently levies a 5% export tax on powdery ore, or fines, and 10% on high-grade lumps. The steel ministry was seeking to raise the export tax to 10% on fines and 20% on lumps.

An increase in export taxes is likely to push up prices and further squeeze margins of exporters already hurting from a recent hike in rail freight rates, which accounts for a bulk of the costs of local exporters.

India produced 226 million tons of iron ore in the fiscal year ended March 31, 2009. It exported 106 million tons, of which lumps accounted for 10% to 12%. Most shipments are to China.

Total iron ore exports during the April-February period of the fiscal year through March 2010 rose 8.7% from a year earlier to 102.36 million tons, showed data from trade body Federation of Indian Mineral Industries.