The Associated Chambers of Commerce & Industry of India (Assocham) has urged the government to reduce iron ore prices by 25% to help domestic steel industry become more competitive.

While domestic iron ore shortages persist in India due to Supreme Court mining bans, steelmakers in China, Japan and Korea are capitalising on depressed global prices of the steelmaking feedstock by exporting steel to India at “throwaway” prices, Assocham says. This is “creating huge problem in India and posing threat to the survival and sustainability of domestic steel industry,” the organisation states in a statement seen by Kallanish.

India’s leading iron ore producer, NMDC, is charging 25% more than other miners in Odisha, which is hampering local steelmakers’ competitiveness, Assocham claims. This is despite state-owned NMDC reducing its prices of iron ore lumps and fines from January.

“Suppliers from Odisha are offering 63% Fe iron ore fines at the rate of INR 2,150/tonne ($34.5) in comparison to INR 2,340/t (together with INR 351 for royalty) charged by NMDC, which is higher by about INR 500-600/t,” Assocham observes. Meanwhile, iron ore prices in international markets fell from $63/t cfr North China on 1 March to around $54/t at end-March.

“India’s steel industry is reeling under severe pressure, on account of sluggish economic recovery and various factors impacting the external and internal environment, like higher prices of iron ore due to its shortage in the country owing to the Supreme Court’s intervention,” the body concludes.