The prices of better quality iron ore at key mining sites in Orissa have gone up by 9 per cent within a month mirroring similar trends in international markets, where prices rose recently on stronger Chinese demand.
Ore with 63 per cent iron content is currently trading at Rs 2,450 per tonne at Barbil, which has fifth largest iron ore deposit in the country. The key steel making ingredient was trading at around Rs 2,250 per tonne a month ago.
"It is mainly stronger Chinese demand that has supported the rates. Shortfall in supply has also boosted the prices,” said an export broker at Paradip Port.
Export rates of iron ore with 63 per cent metal content was signed at $189 a tonne on Monday, higher by $5-6 per tonne from July. Benchmark import price at Chinese for ore with 62 per cent iron content touched $180 a tonne last week, first time since April.
Experts and traders said the demand for iron ore soared as Chinese buyers were replenishing their stocks. Others said the last week's Supreme Court order to stop mining activity in Karnataka state has helped in pushing the rates in global as well as domestic markets.
After Australia and Brazil, India comes third as an exporter of iron ore. About 80 per cent of Indian iron ore is shipped to China.
The Supreme Court on August 26 extended its mining ban order to Tumkur and Chitradurg district of Karnataka, citing environmental concerns. The apex court had suspended mining activity a month ago in Bellary region, one of the largest iron ore producing areas in the country.
Apart from Karnataka, many mines in largest producing state Orissa have stopped production sine 2009, when the state government imposed stricter norms for mining and suspended operation in several mines which did not have necessary permits.
