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, industry data showed on Friday.
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 closed after the expiry of licences.
But analysts say 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, Morgan Stanley said in October.
JSW Steel, India’s third largest steel producer, imported 4.6 million tonnes of iron ore in April-November, followed by Tata Steel with nearly 1 million tonnes, according to data from industry consultancy SteelMint, which tracked shipments at 12 ports.
“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,” said Dhruv Goel, managing partner at SteelMint.
JSW said in September it was planning to import 10 million tonnes or more this fiscal year if the domestic shortage continued and prices stayed low.
The company this week put on hold plans to build a steel plant in eastern India due to uncertainty in sourcing iron ore and coal.
South Africa was the top source of iron ore imports, accounting for 40 percent of the April-November volume, with Australia supplying 15 percent of the total.
Official Indian government data only covers April-August, with imports totalling 2 million tonnes.
Increased output of iron ore from top producers Australia and Brazil has helped widen a global glut at a time of slower economic growth in China which buys around two-thirds of seaborne supply.
Iron ore has fallen 47 percent this year, touching $68 a tonne .IO62-CNI=SI last week, its weakest since June 2009.
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