Rating agency Care wants curbs on iron ore fines export

Mumbai:  Advocating curbs on exports of iron ore fines, the rating agency Care today said the domestic reserves are likely to last only 28 years if export continues.  “Assuming the ongoing expansion in steel capacity,
rating agency care wants curbs on iron ore fines...
PTI 03 Mar 2014, 07:45 PM IST
Mumbai:  Advocating curbs on exports of iron ore fines, the rating agency Care today said the domestic reserves are likely to last only 28 years if export continues.  “Assuming the ongoing expansion in steel capacity, we believe that on an expanded base, the country is only left with iron ore reserves which can last for about 38 years. If the country continues to export iron ore, then the reserves are expected to last for not more than 28 years,” it said in a report.


“The expanding agglomeration capacity of the sintering and pelletisation plants in the domestic market also supports our view on the curb of exports of iron ore fines,” it added.  As per its estimates, domestic iron ore demand is likely to grow around 7 per cent per annum to reach 169 million tonnes (MT) per annum by FY'18.  “Going ahead, we expect significant pellets and sintering capacity addition by the domestic steel-makers,” it said.


“Sintering and pelletisation capacity is likely to increase from about 60 and 54 MT per annum as recorded in FY'13 to about 80 and 92 MT per annum respectively during the next three-four years,” the release said, adding that the expanding agglomeration capacity in this segment supports its view for export curb on iron ore fines.  After imposition of 30 per cent export duty on iron ore; pellets, which are produced from iron ore fines, have seen pick-up in exports. This has raised apprehension about rising exports of iron ore from the country, while domestic steel firms are facing shortage of this key raw material.


On the supply side of iron ore, the rating agency said ore industry is likely to see oversupply in 2015 as many new mines are likely to be operational by this period.  Similarly, it also noted that global iron ore prices may see downward trend due to such oversupply.


“We expect significant decline in prices during 2015 as the new mines will operate at full capacity for the whole of the year. We see global annual average iron ore prices to hover around USD 110-120 per tonne in 2014 and are likely to fall further hovering around USD 85-95 per tonne in 2015,” the release said.  
 
   
 

More from business