The country's iron ore imports rose to a record 6.76 million tonnes in the first seven months of the current 2014-15 financial year as sliding global prices and limited supply in the domestic market pushed steel producers to buy the raw material overseas, industry data showed on Friday.
The country, which was once the world's third-largest supplier of iron ore, has been importing over the last two years due to court-imposed restrictions aimed at curbing illegal mining in the key producing states of Karnataka and Goa.
The shortage deepened in 2014 as some mines in Odisha and Jharkhand were ordered closed after the expiry of licences.
However, analysts say the country is unlikely to absorb a big chunk of the global surplus that has halved iron ore prices in 2014.
In October, Morgan Stanley said that global seaborne iron ore supply will grow by around 330 million tonnes over the next three years, far outpacing demand that will rise by just 194 million tonnes in the same period.
JSW Steel, the country's No. 3 steel producer, imported 4.6 million tonnes of iron ore in April-November, followed by Tata Steel with nearly 1 million tonnes, according to data from industry consultancy SteelMint, which tracked shipments at 12 ports.
"Looking at the current scenario, it does not look like mining will resume soon in Odisha and Jharkhand. Imports are expected to hit 11-12 million tonnes this financial year," said Dhruv Goel, managing partner at SteelMint.
JSW said in September it was planning to import 10 million tonnes or more in FY15 if the domestic iron ore shortage continued and prices stayed low.
The home-grown steelmaker this week put on hold plans to build a steel plant in the eastern part of the country due to uncertainty in sourcing iron ore and coal.
South Africa was the top source of iron ore imports, accounting for 40 per cent of the April-November volume, with Australia supplying 15 per cent of the total.
Official data released by the government only covers April-August, with imports totalling 2 million tonnes.
Increased iron ore output from top producers like Australia and Brazil has helped widen a global glut at a time of slower economic growth in China which buys around two-thirds of seaborne supply.
Iron ore prices have fallen 47 per cent in 2014 so far, touching $68 a tonne last week, its weakest level since June 2009.
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