Steel majors have accused country's biggest iron ore producer NMDC of charging higher prices for ore while exporting at a lower rate and said the anomaly in pricing mechanism of the state-run company would lead to higher steel imports.
Steel producers said ore prices have come down globally to USD 133 at present from USD 177 a tonne in June last year but NMDC is hiking domestic prices due to anomaly in its pricing mechanism, a charge denied by the state-run company.
Internationally there is a downward trend in ore prices but it is an irony that NMDC is increasing it. Our delegation has met Steel Secretary D R S Chaudhary and other officials as this may spell doom for steel makers while increasing steel imports, Deependra Kashiva, Executive Director of Sponge Iron
Manufacturers Association (SIMA) he said.
The prices of coking coal and iron ore are declining globally in sympathy with steel prices due to sluggish demand.
The shortage of iron ore in India due to ban on iron ore mining in Karnataka and closure of certain mines and curtailment of production in some mines in Orissa and Jharkhand is being used as an opportunity by iron ore producers to hike prices to steel manufacturers without considering the global trends, JSW Steel Joint Managing Director and Group CFO Seshagiri Rao said.
It is unfortunate that certain domestic steel producers are forced to import iron ore using precious foreign exchange of the country in spite of having abundant iron ore reserves in the country, he added.
Echoing similar concerns Essar Steel Managing Director and CEO Dilip Oommen, said: Prices of iron ore have already softened internationally by USD 20 a tonne from April to now.
In India, as well, the prices inevitably come down.