NEW DELHI–India, traditionally the world’s third-largest iron-ore exporter, is on course to be a net importer of the steelmaking ingredient in the next fiscal year, according to industry officials, who say a combination of export and mining bans is forcing domestic steel mills to seek the commodity elsewhere.
India is set to see its iron-ore output halved in the year that ends March 31, with its reduced contribution to the global trade having helped pull prices up from multiyear lows in September after the country’s Supreme Court banned exports from Goa and Orissa states earlier in the year due to complaints about illegal mining.
Exports will likely fall to 3 million-4 million metric tons in 2013-14 if mining bans in Goa and Orissa, along with another major producing state, Karantaka, continue, said Basant Poddar, vice-president of the Federation of Indian Mineral Industries, India’s largest mineral trade body. This compares with around 30 million tons this fiscal year and 62 million tons in 2011-12.
Meanwhile, Indian steelmakers, who lack their own captive iron-ore mines, are sharply increasing imports and likely to around 10 million tons in 2013-14, Mr. Poddar told The Wall Street Journal.
Until last year, India dominated spot iron-ore sales to China, the world’s largest consumer, but exports started falling from an average approaching 100 million tons two years ago, when the Supreme Court banned exports from the southern Indian state of Karnataka, also due to illegal mining.
Chinese steelmakers have so far been slow to restock iron ore from other sources due to poor balance sheets and reluctance to buy the commodity amid a price rally, according to Standard Bank’s Melinda Moore.
Global prices, which fell to below $90 a ton in August, have since risen to as much as $165/ton for ore with 62% iron content.
Goa, India’s largest iron-ore producing state, usually exports all of its output, with China as the main buyer.
Goa Mineral Ore Exporters Association spokesman Swaminathan Sridhar said efforts to ease the ban have been unsuccessful so far.
For the rest of this article, please go to the Wall Street Journal website: http://online.wsj.com/article/SB10001424127887323549204578317710787902212.html