India's JSW Raises Iron Ore Imports
JSW Steel, led by billionaire Sajjan Jindal and India's third-largest maker of the alloy, will import 6 million metric tons of iron ore this fiscal year compared with no shipments a year earlier due to production cutbacks at home.
JSW's return to the sea-borne iron ore market after a gap of more than a year could further support prices that seem to be recovering after sliding to 21-month lows in mid-June.
India's Supreme Court in May ordered the temporary closure of some iron ore mines in top producing state Odisha pending renewal of their licences. This has cut output from the state that produced more than 70 million metric tons last fiscal year.
A previous court clampdown on illegal mining in Karnataka and Goa states have also stifled supplies.
The company last week took delivery of its first imported iron ore shipment in over a year in a capesize vessel carrying 170,000 metric tons of high-grade ore from South Africa, JSW's Joint Managing Director Seshagiri told Reuters on Wednesday.
It imported about 1.6 million metric tons in 2012/13.
"Imports are coming all the way from Canada, South Africa and Australia," he said in a telephone interview. "Iron ore can be seen in Karnataka but it is not available to the industry."
India was once the world's third largest exporter of iron ore, shipping more than 117 million metric tons in the fiscal year through March 2010. It slipped to No. 10 last fiscal year, with exports estimated at less than 20 million metric tons.
From about 218 million metric tons in 2009/10, India's iron ore production fell to 144 million last fiscal year ended March 31.
Rao said output is expected to drop to 100 million metric tons in the current fiscal year against demand of 140 million.
The domestic shortage has also forced JSW to use low-grade iron ore ignored by local steel mills before the mining restrictions came into place in the past three years.
This has increased JSW's consumption of coke, a processed form of coal, by up to 25 percent as low-grade iron ore tends to consume more energy, Rao said.
As a result, the company's coke imports will continue to rise from the 8 million metric tons it shipped in last fiscal year.
"That is in addition to productivity loss," Rao said.
(By Krishna N Das, Reporting by Krishna N Das; editing by Mayank Bhardwaj and David Evans)