NMDC may hike long-term iron ore contract prices
The Indian state government, which has traditionally discounted ore to its domestic buyers, is now going to be selling it at full market price. At least, however, they are not going to be selling it for the spot price. Price controls are funny things. They can work in places like China, where the government has the reserves to support them, but in other places they tend to distort the market. In India they have significantly increased the price of ore by keeping supply down by slowing development.
How much iron ore is there is India is the real question at hand. POSCO and Mittal are fighting for what should be easy tonnage, and the government cannot deliver them the leases in sufficient quantities for the 25 million tonnes of steel production they want to install. I have to be missing something as everyone says there is loads of iron ore in India, but maybe it is all in national parks, or just tied up in a nice red tape ball for the world to look at but never touch.
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