Indian iron ore prices are set to come down by at least R400 per tonne with the domestic market currently witnessing an increased supply, though exports have not witnessed any hit as yet. The market is expecting a short-term dip in iron ore exports owing to tremors in Japan, said a Federation of Indian Mineral Industries (FIMI) official.
Sources told FE while KJS Ahluwalia-controlled Naugaon Iron Ore Mines have already brought down iron ore prices by R400 per tonne, Essel Mining and Rungta Mining are also considering a downward revision. Spot prices of Indian iron ore were hovering between $180-$184 per tonne for the last two months and the prices last Saturday were at R8,700 per tonne.
According to S Bhattacharya, secretary, Sponge Iron Manufacturers Association, supply of iron ore fines have increased in the domestic market and this would lead to reduction of pellet prices. KIOCL is also likely to reduce pellet prices, sources said.
According to Bhattacharya of the total average yearly production of around 230 million tonne or iron ore and fines per annum, around 50% are exported and India so far have been bullish on China for exports. But an increasing appetite for Indian iron ore and fines were seen in Japan these days because of increased freight cost of bringing Brazilian iron ore and fines.
Bhattacharya said even after the 20% export duty on iron ore, exporters were upbeat since they were foreseeing extra Japanese demand coupled with steady Chinese demand.