1 APR, 2012, PTI
MUMBAI: Iron ore prices in the global market are likely to soften in the near term and may trade around USD 115-120 per tonne as demand from major consumer China is slowing down, industry experts have said.
"We don't expect prices of iron ore rising from the present level as demand is slowing down in China. Rather, it may soften a bit or remain at the present level as there is sufficient supply in the global market," Secretary General of Federation of Indian Mineral Industries, R K Sharma told PTI.
Presently, 63.5 percent FE content iron ore (higher grade iron ore) is ruling around USD 130/140 on FOB (free on board) basis at Chinese ports.
Referring to reduced supply from India, Sharma said the country is a fringe player in the global iron ore market.
"Countries like Australia, South Africa and Brazil are the market leaders in this commodity and determine prices. India is a fringe player as far as pricing is concerned," he said.
About the impact of Australian tax on iron ore, Sharma said it would not push up prices in the near future.
"Despite the Australian tax, iron ore miners have less leverage to pass on the rise in cost to buyers as there is enough supply in the global market with subdued demand," Sharma said.
Recently, Australia's parliament passed laws for imposition of a new 30 percent tax on iron ore and coal mine after a two-year battle with various stakeholders.
As per reports, this law will affect about 30 companies, including global miners like BHP Billiton, and Rio Tinto among others.
Referring to the pricing trend, Rahul Baldota, Executive Director of Karnataka based mining company MSPL said that price would depend on the demand-supply dynamics.
"Price of iron ore will depend on the demand-supply dynamics," Baldota said.
An analyst with Karvy Comtrade, who wished not to be identified, said, "The Chinese economy is facing some kind of slowdown. If the biggest market doesn't absorb the commodity, then prices are likely to soften in near future,".
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