Indian merchant miners have responded to the steel lobby’s call for a six-month ban on exports, by accusing the latter of “obfuscating the issue to justify an unjustifiable increase in steel prices.”
Pulled up by the Union Minister of MSME and Highways, NitinGadkari for the steep hike in steel prices, the industry through the Indian Steel Association had blamed it on high prices of domestic iron ore in a letter to the Prime Minister’s Office.
The Federation of Indian Mineral Industries (FIMI) has responded accusing domestic steel producers of double standards and seeking a withdrawal of the 15% import duty and other safeguards extended to the Indian steel industry. Both the lobbies, of iron and steel, have been engaged in an aggressive exchange over the hike in iron ore prices that followed a redistribution of mines last year.
Writing to the Principal Secretary to the Prime Minister, Dr P K Mishra, FIMI on Thursday has taken umbrage at the suggestion that iron ore producers were being “unpatriotic” for exporting low-grade ore to China with whom India has had serious border disputes in 2020. Particularly when the steel industry was selling and buying from China too.
Primary steel producers, lobbying for a ban on exports of a grade they had no use for, had themselves sold and exported ore. They had also exported almost 10 million tonnes of pellets whose exports, FIMI claims, is only allowed to state-owned Kudremukh Iron Ore Ltd. “In fact, the selective buying of iron ore had resulted in huge stockpiles of iron ore to the tune of 162 million tonnes,” says the letter.
Who’s to blame for Odisha
FIMI, like the ISA, turned its focus to Odisha where mines auctioned in January continue to struggle to meet expected volumes. It however blames steelmakers for the short supply: an estimated 1916 million tonnes of resources was auctioned (515.83 million tonnes of which was reserved for captive use). Almost 82% of this was bagged by players with end-use plants with one major steel company garnering 59% of the auctioned resources. “Had the primary steel producers who have got the mines in Odisha auction been able to produce the quantity mandated, there would not have been any ground for them to blame standalone miners particularly to NMDC for any alleged shortfall,” is its counter.
Steel prices have increased by Rs 16,700 in the past six months even with coking coal – the other key ingredient that India imports – falling 46% since April 2019, claims FIMI. It accuses Indian steel producers of seeking protection from international players who are dependent on imported raw materials while benefiting from captive and cheaper iron ore mines and labour here but “setting prices almost at par” with international rates.
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