Indian iron ore prices have jumped nearly threefold in the past year amid tight supplies and increasing demand for steel, even as China’s exchanges on Monday raised the trading limits and margin requirements for some iron ore contracts to cool the price rally, Indian analysts expect iron ore prices to stay elevated for the next two-three quarters.
“Iron ore prices are at a decade high globally. Iron ore prices are going to remain elevated at least till FY22. In India, currently NMDC lump ore prices are ruling around ₹6,970 per tonne from around ₹2,250 per tonne in May 2020. In the last 11 years, this is the highest we are seeing. Odisha iron ore prices would also be similar, even higher by a bit,” said Ritabrata Ghosh, associate head – corporate ratings, ICRA, told ET.
Despite the recent uptick in domestic iron ore prices, it is still at a significant discount to the landed price of imports. Over the past month, both global players and NMDC have raised the price of iron ore fines by 17–18%. Sources have also said that there could be further hikes from NMDC in the coming days. The rise in iron ore prices is also likely to keep steel prices elevated in the short term, analysts said.
Steel mills hiked prices by around ₹4,500 a tonne at the beginning of May to bridge the gap between domestic and export prices. Benchmark HRC prices are quoting around ₹65,000 to ₹67,000 a tonne.
