26, 2OL5
BUSI N ESS STANDARD, NOVEM BER
/honoreimport'
becomesviable
DII,IP XUMARJHA
cHtilA tRo]t oRE
Mumbai,25 Nwember
$ltonne
Irnport ofiron ore has again
become viable, due to a sharp
decline in global prices and
steep fall in freight rates over
the past three months.
Since their recent peak in
i
August, the price ofbre for
Chinese delivery
has
declined 18 per ient, to
t
$43.89 a tonne. The bench_
rl:
Jul
mark Baltic Dry Index has
,:.i. ::;r:.;:.r..i.,t:::rilL:ii 40
3l
2015
ilw
24
Source: Bloomberg
fallen 53.3 per cent to S28.
However, domestic iron
ore miners, led by govern_
BATTIC DRY
ment-owned NMDC, have nor
cut pri^ces proportionately.
I}IDB(
That of ore lumps are down
only 16 per cent
since
September, to now ffade ar
,050
tonne. Ore fines have
seen a negligible decline of six
825
?l0O
a
per cent or tlOO over three
monthstoU,56O atonne.
"Futures prices are cur_
rently at $40 (a tonne) and
below- for 2016. Also, freight
rates.have slumped. So, we
nnd domestic ore prices still
600
tur
3r zors ---ffi
375
Source: Bloomberg
lagging. The intensityof the total
iron ore import to
fall in_global marketi is yet decline
6Opercent this yearro
to reflect here. In today,s six million
tonnes. It iays a
global world, competitive- sharp
rise in local production
ness is the buzzword and rs atso
a maior factor.
steel mills are gefting ore at a
the current price,
. 'At has
more competitive rate. rmport
Therefore, it is viable to Karnataka become viable in
and other neigh_
import until prices here fall
in line with g;lobal markets.said Jayant Acharya, direc_
tor (commercial and market_
ing),JSWSteel.
Steel mills in India have
been importing ore for the
past few yean since a supply
defi cit erupted Aue to tfre Ulir
-
Douring $ates, as transporta_
tion from the eastem coast of
Odisha becomes costlier than
impot " saiO n K Sharma sec_
retary-general, Fimi.
A price differential
-oetween
high and
lowgrades
or ore is also a factor for local
steel mills. As against the
$S_O
on mining imposed by the a tonne
differential between
:upr-eme Court. In 2Ol4_lS, ore lumps and fines in gtobal
theybrought in a record level mafl<ets,
of 15 million tonnes, after tonne it works outto$20a
here. Thereforg there
global oreprices hit a historic
rs more room for ore price
cuts
tow ofg4S a tonne for the 62
rn nome markets, to reduce
p€r cent grade. The impon
lmport.
stowed after a margfinal
"Indian steel prices are
rmprovement in globat ore .
cepressed due to onslaught of
prices in August. Also, lower
cneap imports. If the situation
capacity utilisation at steel on
the pricing of ore contin_
mus resulted in a substantial ues,
steel makenwill beforced
taI in ore demand.
look for altematives," said
!9
the H Shiwamkrishnan, chief
- As a consequence,
I'ederation
of Indian Mineral commercial
officer,
rnoustries (Fimi) forecasrs
Steel.
Essar
-/