India became a net importer in CY2014 by importing around eight million tonnes of iron ore against exports of around seven million tonnes, say reports
By Sai Nikesh D
India’s iron ore imports have fluctuated in the recent years ever since the government clampdown on illegal mining in major producing states of Karnataka, Goa and Odisha. However, rising demand and low global prices are expected to result in a surge in iron ore imports in FY2014-15.
According to the Ministry of Commerce, India’s iron ore imports in the first seven months of FY2014-15 stood at around 4.27 million tonnes, compared to a mere 367,000 tonnes in the full FY2013-14. According to conservative estimates, total iron ore imports by India are expected to grow to over 10 million tonnes in the FY2014-15. However, other estimates, such as the one by Industry consultancy Steel Mint, peg the figure at between 11-15 million tonnes.
Analysts say that falling global prices, uncertainty in the domestic mining sector, logistics hurdles and the mining curbs by the government have led to a surge in iron ore imports by India, mainly by the private sector.
According to sources, JSW Steel has already imported 3.7 million tonnes of iron ore in 2014, and plans to import up to 10 million tonnes of iron ore in the remaining months of FY2014-15. Companies such as Tata Steel, which have their own captive mines, also plan to import around 2 million tonnes of iron ore this year, according to various reports. However, it is expected that the recent ordinance by the government to allow auctions of iron ore and bauxite mines will help reduce imports in the coming months.
Meanwhile, India’s iron ore exports in April-October 2014 have plunged to 4.38 million tonnes, down around 73% from 16.3 million tonnes recorded in FY2013-14, and down about 96% from 101.53 million tonnes exported in FY2009-10.
This article was published in The Dollar Business on January 7, 2015.