According to the ministry, the ore should be conserved and it is currently being exported at very cheap rates
Steel minister Virbhadra Singh today said that his ministry will seek prime minister Manmohan Singh’s intervention for banning export of iron ore to protect the domestic steel industry, reports PTI.
“The ministry feels that iron ore should be conserved. We are exporting it at very cheap rates. The ministry will write to the prime minister, requesting him to ban its export,” Mr Singh said in the Rajya Sabha during Question Hour.
The government yesterday hiked export duty on iron ore lumps by 5% to 15% to discourage its shipments and cool down the prevailing prices of the vital input for making steel. The export duty on iron ore fines would remain unchanged at 5%.
Mr Singh said that his ministry is planning massive expansion of steel-making utilities in the country and exuded confidence that India will achieve a production target of 120 million tonnes per annum by 2012, almost double the current production.
“In 2009-10, against the domestic crude steel capacity of 72.76 million tonnes, the production of finished steel is 59.69 million tonnes and domestic consumption of finished steel is 56.48 million tonnes. We expect the production of steel to go up to 120 million tonnes by 2011-12,” he said.
The minister also said that these trends indicate that domestic steel production capacity is higher than the current demand for steel in the country.
The wholesale price-based inflation stands at 9.9% in March, but many analysts criticise the compilation of data, saying it includes several items that are no longer in vogue
The government today said that it plans to come out with a new inflation series, which will give a better reflection of price movements in the country, by July, reports PTI.
“We plan to bring out the new WPI series in June or July. It will have over 600 items from the current 435 items,” R P Singh, secretary with the Department of Industrial Policy and Promotion (DIPP), told reporters on the sidelines of a function.
He said the whole basket of items would be adjusted, depending on the turnover of commodities and “the trial is on.”
The wholesale price-based inflation stands at 9.9% in March, but many analysts criticise the compilation of data, saying it includes several items that are no longer in vogue.
Earlier, officials had said that items such as typewriters and VCRs would be moving out making way for mobile phones and LCD TVs in the new inflation series.
The new index, with 2004-05 as the base year, will have 250 new items and is expected to provide a more realistic picture of price rise and its impact on people, officials had said.
At present, the base year for wholesale price-based inflation is 1993-94.
Most of the new additions would be in the manufacturing products category while primary items, including food-grain and milk, would remain unchanged, officials had said.
There could also be minor changes in fuel, power and lubricant categories, they had added.
A government economist has said that prices of HR coils may fall from the current level of $750 per tonne to $600 per tonne by December
Steel prices are likely to decline in the coming months due to a reversal of the same factors that led to a sharp surge in recent months, the head of the ministry of steel’s Economic Research Unit has said, reports PTI.
Chief economist, Joint Plant Committee, AS Firoz said, “Steel prices have perhaps reached their peak. I see potential weakening of the same, especially for long products, from now on.”
“I expect prices of HR coils to fall from the current level of $750 per tonne to about $600 to $650 per tonne by November or December 2010,” he said.
Explaining the rationale for his forecast, Mr Firoz said, “What one observes currently is a reversal of the factors that led to a surge in steel prices. For example, inventory liquidation over the coming period will replace rebuilding of stocks so far. There are new concerns in the global investment scenario also, which may cause a disruption in the capital market, especially in the emerging economies, thereby reducing investment confidence,” he said.
“There has already been some fall in long products prices in the world market, although the prices of flat products have remained unchanged overall for the time being. The prices of steel scrap and sponge iron have also slipped considerably. These are indications of a weakened steel market,” Mr Firoz said.
However, there are some experts who predict that the direction of steel prices could move even further upward in the coming months. Industry expert and OreTeam.com director Sachin Sehgal, said, “If you look at infrastructure demand from India and China, there are still projects worth $5 billion-$10 billion in the pipeline. All these projects will require steel and cement and both will do well.”
“Prices will continue at a high level and even touch peaks as demand from India and China is very strong. Infrastructure projects will drive demand for steel and if demand is strong, there is no way they (steel prices) will come down,” he said.
On iron ore prices, Mr Sehgal said that they were expected to remain firm in 2010 and would be determined by the actions of the three big players, namely BHP Billiton, Rio Tinto and Vale.