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Import of Iron ore declines sharply by 78% in Q1

15 Jul 2013 Evaluate

Iron ore imports declined sharply by 78% to 185,113 tonnes in the April to June quarter as compared to 826,372 tonnes imported in the same period a year ago, on the back of rise in domestic supply and fall in export. Following this, together with 9.1 percent drop in iron ore imports by top buyer China in June, the global prices of the steel-making raw material, that have already shed more than 12 percent so far this year, are expected to reduce further.

Historically, India has produced sufficient iron ore to meet its domestic demand, but imports by Asia’s third-largest economy increased three fold to 3 million tonnes in the year ended March 31. 2013 after output from top producing states Karnataka and Odisha fell due to a court-mandated clampdown on illegal mining.

Since that, production has picked up pace following steps to clean up the sector of practices such as mining outside allotted areas. A 30 percent duty on exports has also made more iron ore available in the country.

In 2011, India was the third-largest exporter of iron ore in the world, exporting 47 percent of its total production. However, the country’s output of iron ore is estimated to have fallen to about 140 million tonnes in the year ended March 31, 2013 from 207 million in 2011, after a ban on mining in Karnataka and Goa. Output was 167.3 million tonnes for the year ended March 2012. Though, Karnataka has opened some of its mines since late last year on the orders of the Supreme Court.

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