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Hit by rising iron ore pellet exports to China, secondary steel makers seek PM Modi’s intervention

The iron ore pellet prices have shot up after the neighbouring country started importing the product in a big way.

Secondary steel makers have sought Prime Minister Narendra Modi’s intervention to resolve the issue of their raw material shortages due to surging exports of iron ore pellet to China, which, they term, is against the idea of Atmanirbhar Bharat or self-reliant India. India’s export of iron-ore to the neighbouring country during the first six months of the current fiscal was at 20 million tonne, an eight-year high, while the domestic secondary steel producers are facing a dearth of raw materials and rising prices of it, officials said on Friday.

The West Bengal Sponge Iron Manufacturers’ Association had on Thursday written a letter to the prime minister to
address the issue of increasing export of the raw material for the secondary steel products, an official of the industry body told PTI.

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“The association would draw your kind attention towards a massive increase in export of iron pellets with the sole purpose to get benefit from nil export duty,” the letter said. The industry body has demanded imposition of at least
30 per cent export duty on iron ore pellets, he said.

“Exporters are taking advantage of the drawback in the government’s regulation. There is a 30 per cent export duty on iron ore but nothing is levied for shipment of pellets. “They are converting iron ore fines to pellets and delivering it to China,” the official said.

The iron ore pellet prices have shot up after the neighbouring country started importing the product in a big
way, he claimed. The price of iron ore pellet has increased from Rs 4,600 per tonne in April to Rs 7,600 per tonne in August this year, the industry sources said.

Recently, state-run NMDC Ltd had hiked the iron-ore price by Rs 300 per tonne. The secondary steel makers are facing a double whammy of sluggish demand in the wake of the coronavirus pandemic and shortage of key raw materials, the official said.

“The secondary steel industry is bleeding throughout India. We, at West Bengal, are most sufferers as there is no
iron ore at our home state and have import dependency for coking coal. We are facing falling prices of steel and rising prices of iron ore due to mine closure for auction and massive increase in export of iron pellets,” the association’s president Shankarlal Agarwal said.

Steel Re-Rolling Mills Association president Vivek Adukia said more than 2,500 businesses such as sponge iron
plants, induction furnaces, billet and ingot steel manufacturers, foundries, auto component makers, railway parts
producers employ around 3-4 lakh people and are likely to close their units with the present crisis. This may lead to a huge NPA to banks, he added.

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