India Steel Market Watch
October 28: In order to survive the hostile market conditions, the sponge iron (DRI) industry in India needs government support in the form of linkages for iron ore and subsidies for reuse of fines, an official from a leading sponge iron-maker said.
“Iron ore linkages (should) be given to individual sponge iron units, based on capacity, at an affordable price,” the official said.
Besides, the industry also needs support from the government in the form of subsidies or incentives for reuse of fines, mandating iron ore miners a specific percentage of production towards pelletisation or beneficiation and restrictions on ore exports from the country, he said.
Noting that there is a deterioration in the quality of iron ore, he said, the material generally available in the market has less than 60% Fe content, much less than the desired 66-65%. Also, there is presence of a large percentage of fines in the ore supplied.
“Thus, realisation for the finished steel produced by such secondary producers, without captive mines, is less than the cost of production, leading to losses and low utilisation,” he observed.
As a result, of late, regions in Odisha, Bellary and Chhattisgarh have witnessed shutdown of DRI units due to non-availability of ore. Also, linkage of domestic iron ore price to international prices has further escalated iron ore prices, he added.