India's iron ore imports rose to a record 6.76 million tonnes in the first seven months of its fiscal year as sliding global prices and limited supply at home pushed steel producers to buy the raw material overseas. Formerly the world's No. 3 supplier of iron ore, India has been importing over the last two years due to court-imposed restrictions aimed at curbing illegal mining in the key producing states of Karnataka and Goa. The shortage deepened this year as some mines in the states of Odisha and Jharkhand were ordered to be closed after the expiry of licenses.
India is unlikely to absorb a big chunk of the global surplus that has halved iron ore prices this year. Global seaborne iron ore supply will grow by around 330 million tonnes over the next three years, far outpacing demand that will rise by just 194 million tonnes in the same period. Looking at the current scenario, it does not look like mining will resume soon in Odisha and Jharkhand. Imports are expected to hit 11-12 million tonnes this financial year.
Official Indian government data only covers April-August, with imports totalling 2 million tonnes. Iron ore has fallen 47 per cent this year, touching $68 a tonne last week, its weakest since June 2009.