Iron ore import in India set to ramp up sharply in FY15 after witnessing a decline in FY14. Leading steel players like Tata Steel & JSW are going to ramp up Iron ore import in FY15 owing to raw material scarcity in the country.
Recent Supreme Court’s suspension order of 26 mines in Odisha and mining ban in Goa & Karnataka led to low production of Iron ore. Also, a sharp fall in spot prices in various countries, coupled with depreciating INR and increase in domestic ore prices, have prompted Indian steelmakers to actively pursue its import.
More than half of Tata Steel’s 17 MnT ore production comes from its Odisha based captive mines, which is now closed.
Starved of Iron ore, Tata Steel & JSW are importing raw material in this fiscal year. Tata Steel had imported a first consignment of about 40,000 MT Iron ore from Western Australia in Apr’14; however the company mentioned that it was for testing purpose of its steel mills. It is reported that a second consignment of 17,000 MT has been imported through Paradip port in June, 2014.
A senior official of Tata Steel stated, “Company is planning to import few more Iron ore consignments in next few months, especially from countries like Australia, Brazil & Chile through Paradip & Haldia ports.”
JSW Steel will receive its first shipment of 500,000 MT Iron ore by June-end. The company is planning to increase import if spot prices decrease further this year.
Commercial & Marketing Director of JSW Steel, Jayant Acharya stated to media, “We are importing high quality ore of 64% and above to cater the need of our plants. We are seeking options to import from Australia, South Africa & Canada.”
At present, the company is operating at 85% of its capacity at all its steel plants. JSW aims to maintain the capacity and raise it further with the imported ore.
It is in news that for JSW, the landed cost of imported ore is around INR 5,600/MT at its Dolvi plant in Maharashtra, as compared to INR 5,400/MT for Iron ore sourced from Chhattisgarh or Odisha.
Albeit, Steel-360 is predicting that Iron ore import in India will rise in the current fiscal, Odisha government has recently issued an express order for renewal of 8 mines including 5 mines of Tata Steel that were closed after the Supreme Court’s stay order in mid-May. So, this may put a halt on import of raw material.