Beleaguered steel firms see ground for 35% cut in iron ore prices

Domestic steel makers see scope for a downward revision in iron ore prices by 30-35 per cent. International prices of benchmark 62 Fe fines falling 23 per cent over the past couple of weeks and finished steel product prices tumbling by 10-25 per cent between January and August back the case for ore price correction in the Indian market, they reasoned. “Continuing high prices of iron ore is putting further pressure on steel industry and many manufacturers have already started throttling their production. The market is apprehending further deterioration in the situation and many plants may shut down unless immediate attention is given by the government to ensure higher demand in steel and lowering of iron ore prices,” said Manish Kharbanda, president at Pellet Manufacturers Association of India (PMAI). Since January 2019, sponge iron ore prices have shed 21-25 per cent, from Rs 21,200 a tonne to Rs 15,800-16,700. TMT bars (12 mm) too have seen a price fall of 14-19 per cent in the comparable period to Rs 28,500-32,600, from Rs 35,400-37,900. The slide has also been noticed in steel billets, with prices correcting by 20-21 per cent from Rs 31,600-31,950 per tonne to Rs 25,300-25,400. International iron ore prices, after hitting a five-year high of $121 have mellowed to $93 (on August 12) as supplies from Brazil have stabilised sooner than expected. Spot prices are faced with a downside with easing of supply turmoil, lacklustre steel demand outlook and Chinese steel mills loath to book additional shipments.