The Indian Steel Association, representing both secondary and primary steelmakers, has joined other trade groups in seeking the intervention of the commerce ministry and the PMO.
“We would like to bring to your notice that the Indian steel industry is facing an unprecedented shortage of iron ore availability. Production of iron ore across major producing states in the country has been recording a steady drop,” ISA’s secretary general Bhaskar Chatterjee said in a recent letter.
“India’s iron ore production in April to July 2020 witnessed a de-growth of around 50% from last year…It is important to ban the export of iron ore for the survival of secondary steel producers,” said the All India Induction Furnaces Association in a letter addressed to the PMO.
As per ISA’s letter, during the same period, exports of iron ore have witnessed a sharp rise of 63%.
“Iron ore exports have reached new highs in the last two months on the back of strong demand from China. In FY20, India’s iron ore exports rose to 37.69 million tonne from 16.15 million tonne in 2018-19, a jump of nearly 133 per cent,” the letter said.
Speaking to ET, Chatterjee said: “We are concerned that iron ore of India serves China’s purpose before it serves our economy, that’s what will hurt us beyond anything," he said.
“Last year alone, India exported 37 million tonnes of iron ore, 133% higher yoy, and around 82% of the total exports went into China,” industry association AIIFA in its letter.
As per a report by Edelweiss, iron ore imports in China rose 9% YoY to 109mt in September and iron ore inventory at ports has progressively increased to 124mt by September-end compared to 105-110mt in July.
As per India Ratings and Research, the lower production levels have contributed toward higher iron ore prices, which are at Rs 3,250/tonne up by Rs 300 on quarter.
“This phase where iron ore prices have increased is expected to exist until the supply from Brazil is streamlined and the auctioned mines in Odisha operationalize. Looking at the existing situation, both are expected to continue at least until the third quarter of FY21," said an executive at a top iron ore producing company.
"We envisage the prices to stabilize in the 4th quarter of FY21 and initial quarters of FY22,” the person quoted above added.
Iron ore production in April-September 2020 was recorded at 47 million tonne, which is a sharp de-growth of 50% over the same period last year. Adding to this, state-owned iron ore producer, NMDC has recorded a 9% fall in ore production in the April to September period to 12.24 MT compared to the corresponding period last year.
While industry bodies have requested a quick intervention by banning exports and bringing in policy changes, ISA’s Chatterjee said that the situation is short-term and only needs a temporary fix.
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12 Comments on this Story
DG42 days ago
Instead of an export ban that will artificially depress prices for ore, make it mandatory to give the first right of refusal to the domestic users. Let them match the ore prices. Alternatively, impose a small export duty like 5%. So, unless domestic prices are tool low, it is slightly advantageous to sell to domestic producers. One segment of Indian industry should not hurt the other. Let steel industry pay a fair price and make Indian steel from Indian ore.
Ravi kumar43 days ago
Steel industry needs to be more competitive and do their own R&D. We cannot ask govt to save us from competition. Chinese can make iron from 50% grade iron ore fines, where as indian manufacturers need 58% iron grade lumps to be able to make steel. Those from the sector are well aware what I am saying. Yes I agree that govt needs to stand behind the industry. But our industry doesn't invest in research thats the reason its getting behind Chinese.
TS Darbari43 days ago
TS Darbari - Metals have been one of the core drivers of industrialisation. Among metals, steel has historically held a dominant position. As a raw material and intermediate product, production and consumption of steel are widely regarded as indicators of economic progress. Thus, it would not be an overstatement to say that the steel industry has always been at the forefront of industrial development and forms the backbone of any economy. #TS_Darbari #Ts_Darbari_Blog #TS_Darbari_News #Ts_Darbari_Views #Ts_Darbari_Blogger #TS_Darbari_Comments #Ts_Darbari_Opinion #About_TS_Darbari #TS_Darbari_Articles #Politics #Views #Comments