India’s JSW Steel to import 6Mt iron-ore, first shipment left SA this month
Indian steel producer JSW Steel is to import six-million tons of iron-ore during 2014/15 to tide over a domestic shortage of the raw material.
“It is an irony that India has to import iron-ore despite having large resources of it,” says JSW Steel joint MD Seshagiri Rao.
“Indian steel manufacturers are losing out on the most competitive advantage of domestic iron-ore resources and [have to] resort to imports, denting [the] competitiveness of local steelmaking,” he adds.
The steel company imported its first iron-ore shipment of 170 000 t of high-grade iron-ore from South Africa earlier this month and three more shipments of Capesize vessels were scheduled to arrive at Indian ports over the next few days.
These imports are necessary for the company to supplement the supplies of iron-ore in the domestic market, owing to a substantial drop in domestic production, besides restrictions on the movement of iron-ore from one State to another, Rao says.
The recent closure of mines in the eastern Indian province of Odisha, coupled with delays in getting mines in Karnataka and Goa back into operation, has resulted in local steel mills facing acute shortages.
“We have targeted to import half-a-million tons of high-grade iron-ore every month to maintain capacity utilisation of our plants at optimal level,” Rao says.
“Apart from supply-side issues, the divergent trends in prices, wherein domestic iron-ore prices were surging, while international prices had fallen 30% over the last year, is a grave concern for domestic steel producers,” he says.
According to the steel company, capacity use of domestic steel mills has fallen to 77%, owing to shortages of iron-ore during 2013/14, from 88% during 2010/11.
Indian iron-ore production slumped from 218-million tonnes in 2009/10 to only 144-million tons in 2013/14 and is forecast not to exceed 100-million tons in the current financial year, compared with domestic demand of about 140-million tons.
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