Ltd., India’s most valuable steel producer, is predicting declines for iron ore
next year as demand from biggest consumer China eases and supplies recover.
Prices may trade between $80 and $85 a ton for the rest of 2019 before sliding to $60 to $65 next year, Seshagiri Rao, joint managing director of the Mumbai-based mill, said. The key steel-making raw material has benefited from “speculation” and there is no reason why ore should be trading at elevated levels of about $95, he said.
“Gradually we are seeing some moderation” in steel production globally and “once the crude steel production comes down, including in China, then automatically the demand for raw material should come down,” he said in an interview Thursday. “Whatever disruptions we have seen in supplies are slowly, gradually normalizing.”
prices are moving in a completely different direction to other materials such as scrap, coking and thermal coal, and electrodes, which are declining and are more reflective of ebbing demand from the steel industry at present, Rao said.
JSW imported between 6 million and 8 million tons of iron ore in the year ended April, he said. That works out to about as much as two-thirds of India’s total iron ore imports, which jumped 47 per cent to 12.8 million tons last year. Still, the mill may not import any ore this financial year as local supplies jump ahead of the expiry of merchant mining leases by March 31, Rao said.
“A lot of mines are expiring next year, so everybody wants to produce more and supplies are increasing. So, therefore, we are sourcing locally,” he said. “This financial year we have not planned imports of iron ore.”