Odisha based steel firms are facing a shortage of iron ores which are under zero operation, have asked the government to make mandatory for all iron ore miners of the State to sell half of their production to Odisha sales.
They have demanded to make it sure unless they consume 50% for their own captive use, whereas the balance quantities of the ore could be exported to other states or countries.
While this may amount to deviation from auction rules, but the industry may suffer a lot, and this could hit production, a steelmaker said on such condition of anonymity.
Tata Steels which owns captive in the State says it doesn’t seem as if there is any shortage of iron ore in the State.
Odisha produces 25% of the country’s total steel and the decreased production and lucrative export to other states of India are the two main reasons for the shortage.
High steel price has, however, made the raw material dearer as well. The State produces 10 MT iron ore annually, and the last fiscal was when it grew up to 145 MT.
Odisha has taken leases for 19 merchant mines that contribute around half of Odisha’s 115MT iron ores in 2018-19 expired in March, and 18 of them were successfully auctioned.
The government extended the statutory approval of these mines by two years to ensure successful bidder that can assure resume production immediately.All of them belongs to JSW steel that dispatches entire production among their own plants.
On July 2020 they dispatched 3 MT against 8 MT in July 2019. In contrast, all-time high iron ore prices in the international market because Chinese demand and disruption in supply from Brazil due to the pandemic.
Of the total 20MT exports to China during the first half of the year includes the low as well as High-grade iron ore pallets.
The higher exports and higher sales to other states of India have led to a serious shortage of iron ore in the home ground, and consequently, the prices went up in Odisha and the adjoining states.
Export of steel from India increased due to the limited demand in the domestic market of the ongoing financial years.
And now as of the increased demand in the domestic market, high international prices remaining lucrative for the export of steel.