Indian Iron ore import may possibly touch 4-5 MnT this fiscal, which would be a record high. In short term, import probabilities are huge, Arun Maheshwari, VP, Commercial at JSW Steel told SteelMint.
Import might continue as domestic prices are high and shortage of raw material still prevails in the country. In addition, transporting Ore from one state to the other results in high freight charges. India is accessible to import from South Africa, Australia and other countries as well because of strategic location.
Overseas Iron ore prices have plunged to quite low level, while Indian Ore is still expensive. Thus, we as a country are on a competitive disadvantage, he added.
“On one hand, the country is targeting Steel growth. While on the other, Iron ore movement and production are on a decline. On top of this, NMDC is exporting the Ore. We aren’t securing ourselves enough but enriching other countries. Indian Iron ore producers and suppliers have their own functioning and allocating strategy,” remarked the official.
On 16 May, Supreme Court directed suspension of mining operations from 26 Iron ore and Manganese ore mines (includes 10 merchant Iron ore mines which produced 19.1 MnT Iron ore in FY14) running under second deemed renewal. This has already impacted supply of Iron ore in merchant market. And, weakening prices in global market will support import prospects, said a Steel maker based on west coast of India.
“Current cost of procuring Fe 64/63% Iron ore fines from NMDC costs us around INR 5,900-6,100/MT on ex-Kandla Port basis, whereas imported Fines of similar grade would cost us about INR 6,100-6,200/MT (ex-Kandla Port),” he further added.
After suspension of mining operations in Odisha, companies such as Tata Steel, JSW Steel and Steel producers located on the west coast started importing Iron ore. Looking at Iron ore scenario in Odisha, Steelmakers do not see an improved supply in merchant market before August, 2014. Eventually, they have to look at imports.
- Will India continue to import Iron ore assertively?
- Will domestic Iron ore prices dance to the tune of international market?
- What if merchant miners do not get renewal?
- What are the other raw material sourcing options?
- Will raw material insecurity let India reach its Steel target?
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