Steel industry in Karnataka imported around 6 million tonnes of iron ore during 2018-19 due to a shortage and
availability of poor quality ore, according to a steel maker.
Seshagiri Rao, Joint MD, JSW Steel and Group CFO said, "The restoration of the iron ore supply from this mine will enhance the availability that would benefit iron ore-starved Sponge iron/pellet/steel plants in Karnataka.
Steel makers are happy that the resumption of mining at the Donimalai mine would bring down the price by around 10-15 per cent, said a senior representative from the mining industry.
Basant Poddar, former Chairman and member of FIMI (South), added,"The real estate and automobile sectors are in a
bad shape at present. Prices of iron ore in Karnataka as likley to head south due the export ban that is still in place. Also, the secondary steel sector is in doldrums. The other major macro factors that will push down the prices are the slow down in the steel sector and the slowdown in the economy.
After a robust 7.5-8 per cent growth in the last two fiscals, the domestic steel industry is expected to witness a mid-cycle slowdown to 4-5 per cent this fiscal, according to credit rating agency Crisil. The agency has attributed the slowdown to muted construction investment and a weak automotive market.
Global steel prices have declined 13 per cent in the first eight months of 2019 due to weak demand, unseasonal jump in global inventory levels--up by about 35 per cent through August--and trade tensions. This was despite a whopping 56 per cent run-up in global iron ore prices during the same period, shrinking margins for producers.