Indian steel major wants domestic iron ore prices de linked from global levels
The extreme volatility in iron ore prices has sprung yet another surprise in the form of a move to press for de linking Indian ore prices from global levels.
Mr Malay Mukherjee CEO of Essar Steel said that "It is unfair on the move to buy at global price levels. India is one of the few countries where Greenfield capacities are still being built, while elsewhere there are only expansions of existing capacities. Already our cost of setting up a unit is high due to steep interest charges. At the same time, we have to pay an international price for a raw material which is mined here in India."
If the effort, which is still in the preliminary stages and is being debated among industry players, goes through, it would signal the growing clout of Indian steel mills in the global arena and also push the case for a new benchmark in iron ore pricing based on Chinese and Indian cost patterns. So far, the price is fixed on negotiations between Japanese steel mills and selected powerful Australian miners, despite India and China being the world's two fastest growing steel markets.
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