MUMBAI (Commodity Online): Economic revival in global economies have resulted in the iron ore prices rising by 11 per cent in one month’s times, that too despite a fall in demand.

The benchmark iron ore price, including freight, ex-Chinese ports, firmed up to $91 a tonne this week as against $82 a tonne a month ago. However, lower grade ore with 58 per cent iron content remained flat at $75 a tonne.

Steel industry is not very happy with the development because demand for long products needs to catch up, while flat products are doing reasonably well on rising consumption of white goods and other similar products where steel flat is used abundantly.

Because of this steel industry is in a mess, with so much of uncertainties. Iron ore prices are not fixed, neither for the current year nor are there any indications for the next year. China is yet to take any clear stance on iron ore prices, which BHP, Rio and Vale are still not ready for talks.

China is gradually increasing mine acquisitions in under-developed African countries, including Zambia and Angola, where an abundance of proved natural resources await exploration and local governments invite overseas participations. China, the world’s largest steel producer, is targeting 600 million tonnes (MT) of output this year.

India contributes about 100 mt of China’s total iron ore consumption of about 700 MT. As local mills are not geared up to use fines, India will continue to meet China’s ore deficit on a spot basis only.

Sponge iron producers have also raised prices by 7-8 per cent or Rs 600-800 a tonne to Rs 13,600 a tonne on rising raw material prices and inventory pick up by steel majors. Coal, a major ingredient for making sponge iron, has also gone up by 15 per cent.

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