Fix iron-ore reserve price as per market practices: BCIC

B D Narayankar

Press Trust of India

Bangalore, Sep 16: The Bangalore Chamber of Industry and Commerce today appealed to the Centre to fix reserve price for iron ore grades in e-auction at current market prices to save the steel industry from collapse.

"The reserve price is being fixed disregarding prevailing market prices for similar grades in view of the scarcity of the material in the market and the dire need of the steel industry," BCIC said in a statement issued.

While industry awaited the e-auction, 'arbitrary' fixation of reserve price for low grade iron ore deterred steel companies from bidding for this ore, BCIC said.

Industry sources said the mechanism for fixing base price seems to be on pro-rata basis as against the market practice.

BCIC said as per international practice, difference in prices for every 1% Fe is about USD 6 per tonne of iron ore as low grade iron ore fines (Fe-60% and
below) have to be beneficiated before use in steel manufacture.

"Benefication does not recover 100% Fe and results in loss of more than 30% of the input quantity of Iron ore," it added.

Moreover, additional fuel in the form of metallurgical coke is needed to use low grade fines. That is why a discount of USD 6 per tonne is offered in the international market, BCIC said.

In a recent auction of low grade iron ore by NMDC, it was sold at Rs 1,410 per tonne. Difference in prices of high grade iron ore to low grade was Rs 1,470 (USD 30.75) for a difference of 6% Fe either USD 5.1 (US) for every per
cent fall in Fe, BCIC said.

The just concluded auction saw only Rs 162 discount (USD 3.39) for 6.1% Fe either USD 0.57 for every per cent fall in Fe. Evaluation showed more than 75% premium on low grade iron ore is charged compared to that of NMDC, BCIC said.


Links

http://www.business-standard.com/india/news/nmdc-rampsiron-ore-production-in-karnataka/146950/on

http://www.moneycontrol.com/news/business/fix-iron-ore-reserve-price-as-per-market-practices-bcic_587121.html

http://www.thetop.in/news/fix-ironore-reserve-price-as-per-market-practices-bcic

http://www.indiareport.com/India-usa-uk-news/latest-news/1086766/Business/4/20/4


http://www.mybangalore.com/news/fix-iron-ore-reserve-price-as-per-market-practices-bcic.html