Record iron ore glut of 204 mt to trigger price fall

Analysts feel huge domestic surplus together with global iron ore prices entering bear territory

Weak domestic demand despite expanding iron ore production in the country has led to the mineral ore surplus reaching an all-time high of 204.09 million tonnes (mt) at the end of 2016-17. Inventory of iron ore at mine pit heads has climbed to 149 mt (as on March 31, 2017) with ore getting accumulated in key producing states like Odisha and Jharkhand.

Exports, the only outlet for such excess ore is unviable with the present 30% export tax and softening of international iron ore prices. Prices of benchmark 62% iron ore fines have crashed to an 11-month low of $55.43