Home » India » MMTC’s Gold, Silver Imports to Rise

NEW DELHI – MMTC Ltd., India’s largest gold importer, will step up imports of both the yellow metal and silver in the financial year that started on April 1 to tap growing demand as investors scramble for safe assets, a senior company executive said Tuesday.

The state-run trading company expects to import around 275 tons of gold in 2011-12, compared with 245 tons a year earlier, said the executive, asking not to be named. It also plans to raise silver imports by 50% to 1,200 tons during the same period, he added.

European and U.S. stock markets tumbled Monday due to euro-zone debt concerns and a cut in the U.S. credit outlook by Standard & Poor’s, while gold settled at a record and silver reached fresh 31-year highs on investor demand for safe haven assets.

The April delivery gold contract settled at a record $1,492.30 a troy ounce Monday, up 0.5%, on the Comex division of the New York Mercantile Exchange. Silver for April delivery settled 0.9% higher at $42.957 a troy ounce.

“As long as uncertainties about the global economy continue, gold and silver have good investment demand due to their safe haven status. Also, the Chinese demand is growing,” the MMTC executive said. “Limited resources are also increasing demand for silver.”

Demand for precious metals has shot up in India, the world’s largest gold importer, with pure spot gold hitting an all-time high of 21,540 rupees ($484) per 10 grams Monday.

Separately, the executive said iron ore exports from India, the world’s third-largest supplier, will likely fall in 2011-12 due to a higher shipment tax. But he said it’s too early to give a precise forecast on these exports for 2011-12.

The government earlier this year raised the export tax on iron-ore fines and lumps to 20% to boost local steel mill supplies. It earlier levied an export tax of 15% on lumps and 5% on fines.

From April 1, 2010, through February 2011, India’s iron-ore exports fell 18% to 85.43 million tons, according to the Federation of Indian Mineral Industries. MMTC is one of the country’s largest exporters of iron ore.

India’s iron-ore sales to Japan won’t suffer as the Pacific nation will start rebuilding its devastated regions following last month’s major earthquake and tsunami, said the executive.

Japan bought 5.87 million tons of iron-ore from India in the year through March 31, 2010, or as much as 5% of the South Asian nation’s exports.

source

wall street journal

 

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