Indian domestic iron-ore prices were moving in the opposite direction to global trends with steel producers facing a double whammy of shortages and high raw material costs.
NMDC Limited, the country’s largest iron-ore miner, has announced that it would maintain the higher price levels during July after implementing a hike last month.
The miner said that in case of high-grade lumps it would maintain the price of $77/t while in case of fines it would continue to charge $53/t for July shipments.
In June, NMDC increased price of lumps by $5/t and that of fines by $4/t, at time when global iron-ore prices have been in a tailspin.
Global iron-ore prices for high-grade fines (Fe content 63.5% and above) fell below the $90/t mark, last month before making a tentative recovery to range of $93/t to $94/t currently.
According to Indian miner-exporters and traders, despite sharp fall in offers, local iron-ore fines were finding very few buyers from traders representing Chinese steel mills.
Most Chinese steel mills were facing very tight liquidity situation and were maintaining the lowest level of raw material stocks to cut down on inventory carrying costs and hence transaction volumes in the Indian export market were negligible despite the fall in offer prices, they said.
However, the fall in prices and export volumes had no salutary impact on domestic supplies or prices since overseas shipments were primarily that of fines while domestic steel mills were equipped for only high-grade lumps as feedstock, the traders said.
According to an official in Rashtriya Ispat Nigam Limited (RINL), a government-owned steel company which sourced ore from NMDC, it was "strange" that the latter was maintaining a higher iron-ore price in the domestic market when international prices were weakening when the avowed policy of the miner was to follow international price parity for its domestic pricing strategy.
Apart from prices, domestic steel producers were facing a shortage of supplies with several companies like JSW Steel and Tata Steel having concluded import contracts to tide over the situation.
But officials in JSW Steel and Tata Steel said that dependency on imported iron-ore was not a sustainable over the medium term despite lower international prices.
It is pointed out that while import duty on iron-ore was levied at 2.5%, finished steel imports from Japan and South Korea attracted import duty of only 1.9% and hence both higher domestic iron-ore price and landed price (CFR plus import duty) was making local steel production uncompetitive.
Source: Mining Weekly
- metaljunction »
- Metal News
Metal News & Events
METALJUNCTION PUBLICATIONS
Coal Insights (English) Monthly
![Steel Insights](/assets/images/news/coal-insights.jpg)
Coal Insights is a ready reckoner for anyone associated with coal. This publication is aimed at tracking everything related to coal in India.
India Coal Market Watch(English) Monthly
![Steel Insights](/assets/images/news/ICMW_Jan09.gif)
ICMW is a one-stop source for all news, data and research pertaining to coal demand, consumption, stocks, spot- and long-term prices with respect to the Indian Market.
India Steel Market Watch (English) Monthly
![Steel Insights](/assets/images/news/ISMW.gif)
ISMW is a brand new high-end steel market report, covering all aspects of the steel industry in India.
Steel Insights(English) Monthly
![Steel Insights](/assets/images/news/SteelInsights.jpg)
Steel Insights delves into various facets of the domestic and global steel industry such as market fundamentals, raw material price trends, price forecasts etc.