India to Emerge as Source of Cheap Ore

India is all set to enter the iron ore market, dominated by Brazil, as another source of cheap ore.

India’s steel ministry announced that state-owned mining company National Mineral Development Corp. will raise iron ore output to over 75 million tonnes per annum by the 2018 to 2019 financial year. The target for 2020 to 2021 is more than 100 million tonnes per year.

As quoted in the market news,

A decade ago the emerging Karnataka-Goa trade with China laid the foundation for today’s iron ore market.

At the time ore went for less than $20 a tonne with the annual price – known as ‘the benchmark’ – set during secret negotiations between Brazilian and Australian miners and Japanese steelmakers.

But with steel output growing by a staggering 23% per year, Chinese buyers desperate for ore were forced to chase tonnage on the sidelines of the global trade.

India’s swing suppliers quickly stepped into the breach.

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