Date:19/09/2008 URL: http://www.thehindubusinessline.com/2008/09/19/stories/2008091950500700.htm

Back Drop in iron ore demand worries SE Railway

Average daily loading drops to 30% in last two days.

Reasons
Drop in loading for integrated steel plants attributed to good stocks at the plant levels caused by drop in production due to shutdown and not-so-satisfactory handling of rakes.
The fall in demand for rakes for exports due to drop in the price of ore in the international market.

Our Bureau

Kolkata, Sept. 18 South Eastern Railway (SER), the major transporter of iron ore, is extremely concerned at the sudden drop in iron ore demand by domestic steel plants, sponge iron units as well as exporters.

“In the last two days, the average daily loading has dropped to nearly 30 per cent”, Mr A. K. Jain, General Manager of SER, told newspersons here on Thursday. “Against our capacity to load 60 rakes of iron ore a day, our daily average loading has dropped to around 23 rakes in last two days.”

The daily average loading for integrated steel plants has dropped to 18 rakes a day as against the programme of 26 rakes, registering a drop of 30 per cent; for pig iron and sponge iron plants to two rakes from 11 rakes a day, entailing a drop of 80 per cent; and for exports to three rakes from 11 rakes a day or a drop of about 70 per cent.

The downward trend in iron ore loading started from the third week of August, he said expressing apprehension that it might continue. “What I gather from discussion with exporters and others is that the situation is unlikely to improve shortly,” he observed.

The problem, he said, had been compounded by the restriction imposed on road movement in iron ore mining areas in Orissa by the State Government. “The ban imposed in Sundergarh area a couple of months ago is still continuing; worse, only two days back, fresh ban has been slapped in Barajamda and Barbi areas”, he said, pointing out that the road movement of ore from the mines to the nearest railhead has come to halt.

Mr Jain was worried that SER might find it hard to hit the targeted freight traffic of 124 million tonnes for the current fiscal. After all, iron ore accounts for 70 per cent of its total freight traffic. “This will impinge on our earnings also”, he added.