By the end of March’14 first week, Iron ore snapshot looks weak on performance as it has seen a major global price decline and production decline in Indian domestic market. Here are a few key reasons that accounts for existing situation.
Indian Iron ore prices have not seen any noticeable change over the past 3 months. Only a slight movement within a range of about INR 40,000-45,000 could be traced. This stability in price is accounted to low domestic demand of the material as steel market has been cold. Iron ore Fine prices had a mild upsurge of INR 100-102 owing to the increasing demand from the Pellet makers. On the export front, Indian exports were seen at the lowest to about 18 MnT in FY13. However, export is expected to witness a further slide to 14-15 MnT.
The global Iron ore prices were seen declining in a range of 20-30% over the last 3 months, owing to the low steel demand in China. Buyers are not showing interest in active purchase as there’s huge stockpile in China major port. On 10, March 2014, the prices have hit an all time low of about USD 113.
New hopes were seen in Goa when SC gave a green signal for sales of 15 MnT Iron ore lying ideallysince 2012. The Iron ore movements, which were restricted owing to the illegal practices by the miners is now on the go; although with very less interest than expected. For the reason that they were lying at various jettys, mines head and ports for over 2 years now, the material has been through a major degradation (Fe 51 – 58). Buyers are reluctant as their analysis confirms high moisture content and low Fe metallization.
It’s in the news that High Court in Odisha might impose 50:50 scheme for Iron ore. It means, about 50% of the material must be sold within the boundary of state while the rest half can be transported out. As Odisha is the center of Iron ore production (about 62 MnT per year) miners argue that utilization within the state is not this high. When on one hand, local manufacturers welcome the scheme. On the other hand, manufacturers from other states are not in favor of this regulation.