India's import of steel scrap, coal set to rise
Some analysts expect import of steel scrap and coal to rise because of shortage in the domestic availability of iron ore and coal.
Decline in domestic iron ore production on the back of ban on mining in Karnataka and Goa prompted consumers of ore to import steel scrap from abroad.
Some reports suggest that India's import of metal scrap almost doubled from $7 billion in 2009-10 to $13 billion in 2012-13.
Although, the Supreme Court allowed category A and Category B mines to resume operation in Karnataka, these mines may take time to begin production.
Similarly, import of coal has been rising because of strong demand from thermal power units. India's coal import in 2012-13 was 135 million tonne, including thermal and coking coal, and it is expected to rise 10 per cent as demand from power plants is increasing.
Thermal coal prices were in the range of $85-110 a tonne last year and at present are $80. For 2013-14, the price outlook has been lowered. Citi has said the average price could be $89.
Some analysts expect India to import $3.5 billion worth coal and $3 billion worth steel scrap in 2013-14.