Indian Iron Ore Imports hit 2.6 MnT during Apr-Aug’14

Indian Iron ore imports have shown a consistent improvement since the beginning of this financial year.

Most apparent reasons that have strengthened imports could be summarized as:

• Mining restrictions imposed on 19 Iron ore mines in Odisha
• Odisha’s High Court nod for 50:50 rule
• Delay in granting renewal to banned mines owing to CEC’s report
• Royalty hike from 10% to 15% announced by the Indian government
• Favorable exchange rates (monthly average of exchange rate was at 60.8 in Aug’14)

All the above mentioned factors have put miners under pressure as a result of which most of the mines are closed or are not utilizing their full capacity. With every passing month, situation is worsening and developed Iron ore supply crunch in the domestic market.

Steel biggies, especially without captive mines, are left with possible options as procuring Iron ore from Karnataka e-auctions or importing from other countries. Scarcity and then royalty hike have made domestic ore costlier over the imported ones. So, the import by steelmakers has shown an uptrend since Apr’14.

JSW Steel & Tata have been importing the raw material from Australia, South Africa & Mauritania. Till now in FY15, 2.2 MnT raw material (Iron & Pellets) has been imported, out of which JSW Steel & Tata have imported 1.41 MnT & 0.22 MnT respectively. Also, 0.2 MnT Pellets have been imported by far by companies namely SIMEC & Gallant.

Indian steelmakers had imported 3.2 MnT in FY13, 0.3 MnT in FY14 and if the current situation persists, Iron ore imports are likely to cross 5 MnT in FY15.

 Please click below to download the details of Iron ore imports in FY15 (till Aug’14)

http://www.steelmint.com/fileForMail/IRON_ORE_IMPORT_DATA_(2).xlsx