India: Will 50:50 Sales Rule in Odisha keep Iron Ore Prices High?

Odisha government enforced 50:50 Iron ore sales rule in December 2012, which allowed to sell only 50% of total Iron ore within the state. The mismatch i.e. high demand and low supply will continue to keep prices on the higher side.

Restriction in Iron ore offering outside state albeit high requirement also results in accumulation of stock. Ultimately, this is a hindrance in production. On one side, miners are earning profits and on the other side, state based industries are reeling under severe raw material crisis for last several years.

Will Iron ore prices stay high?

• Will Odisha government facilitate fair market prices and raw material distribution?
• Are Pellet prices likely to follow the trend despite increasing capacity?
• Will Odisha based Steel/Sponge iron producers have to depend on outside miners?

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