Iron ore prices continue to rise as most of the private mining companies have increased prices by another Rs 250 per tonne.
?Mining companies except for public sector companies have increased prices of Calibrated Lump iron ore by Rs 250 on Monday,? an industry source told FE.
Prices of ore would now be Rs 4,400 per tonne against Rs 4,150 per tonne earlier.
Calibrated Lump iron ore contains 64% errous and are generally in size ranging from 5mm to 18mm.
Prices of iron ore have doubled in the spot market in last one year and are expected to rise by another 30% in the long-term mainly due to demand from China.
India produces 180 million tonne of iron ore annually, which is roughly 10% of the total global production. Global production of iron ore is estimated to be 1,800 million tonne. Also, India exports roughly 50% of total domestic iron ore production and that?s why steel industry has been demanding phase out of iron ore exports.
However, iron ore exports are mainly fines. Of the total 180 million tonne production, fines constitutes roughly 60% and mining industry claims that fines are utilised by any major domestic steel companies and they are left with no choice other than exports. Steel industry has been demanding phase out of iron ore exports mainly The Rs 250 per tonne hike in prices of iron ore may have a cascading affect on steel prices domestically, as there will be cost pressure and global demand for steel remaining pretty strong and steel companies may passing it on to consumers.
Already, all major steel producers including SAIL and Tata steel have announced increase in prices. While, SAIL has increased prices of its products by Rs 500-Rs 600, Tata steel too announced a hike of Rs 600 per tonne. Other steel major are also believed to have increased prices.