Domestic iron ore prices are showing a widening gap across producing states in India, according to price trends sourced from miners across the country.
Prices of iron ore lumps across three of the largest iron ore-producing Indian states, namely, Odisha, Chhattisgarh and Karnataka, vary up to INR 2,000/mt ($29/mt), while the normal average regional price difference is in the range of INR 500-750/mt ($7-11/mt), miners said.
Miners and officials at steel companies have said that prices of iron ore lumps in Karnataka are currently averaging in the range of INR 3,000-3,500/mt ($44-51/mt), while lumps available from mines in the eastern Indian state of Odisha are being made available at INR 1,500/mt ($22/mt), the miners said.
Officials at steel companies said that steel mills in Karnataka which sourced the raw material locally through e-auctions had to pay a net price of around INR 4,500/mt ($66/mt), as base price at the auction were at a very high level.
Industry officials said that steel mills located in Karnataka require an estimated 21 million mt of iron ore lumps per year but, owing to the high cost of the local raw material, steel mills are sourcing about 8 million mt from neighboring states as the net price at the steel mills is cheaper even after factoring in transportation costs.