Steel industry’s iron ore shortage charge ‘artificial’, say miners

By: |
November 24, 2020 2:30 AM

Iron ore miners on Monday described as “artificial” the steel industry’s allegation that the steel making raw material is in shortage in the country at present.

While the registration was earlier mandatory for the imports of about 300 steel and iron products, its scope has now been widened to include about 530 more products.Against the annual total iron ore requirement of 165 MT, the domestic production is around 240 MT, thus the talk of scarcity is “artificial”, said FIMI.

Iron ore miners on Monday described as “artificial” the steel industry’s allegation that the steel making raw material is in shortage in the country at present. The domestic steel industry has been petitioning the government for imposing a ban on iron ore exports, at least for the time being, in view of the scarcity and spiraling price of the raw material.

Last week, steel minister Dharmendra Pradhan said a short-term ban on iron ore exports was under consideration.

In a letter to the steel ministry, the Federation of Indian Mineral Industries (FIMI) said of the total 29 million tonne (MT) exports between April and September of the current fiscal, about 19 MT of ore were of lower grade which domestic steel companies do not use. Also, a majority of such exports were from the 163 MT stocks, as on March 31, 2019, lying at mine-heads.

Against the annual total iron ore requirement of 165 MT, the domestic production is around 240 MT, thus the talk of scarcity is “artificial”, said FIMI.

Since the production and availability of iron ore is in surplus, the steel/sponge iron/ pellet plants are very choosy and purchase iron ore that has more than 62% Fe content. Around the world, steel mills use iron ore having an average of 60% iron content; China uses even less, just 58% iron content.

“It appears that the scare of artificial scarcity of iron ore in the country is being projected by some of the primary steel producers for their vested interest. It is rather intriguing and surprising that steel companies are making hue and cry for shortage of iron ore,” FIMI said.

Steel mills, however, say that since June this year, the Odisha iron ore fines price has gone up by over 175% and NMDC prices by 84% and availability of iron ore has become a huge cause for concern.

“This is putting a lot of strain on the steel producers both from cost point of view as well as availability point of view. There should be an immediate stop of iron ore exports until iron ore availability improves,” one steel firm said.

India exported 36.62 MT iron ore in 2019-20, up from 16.19 MT in 2018-19. Exports of iron ore were the highest in 2019-10 at 117.37 MT.

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