India to cut back on iron ore exports
The expansion of the Indian steel industry could mean a sharp reduction in iron ore exports for the Asian country, as the world's third largest exporter of the resource may cut the supplies line by nearly half over the next five years, according to Reuters.
This development may have a significant impact on world supplies of iron, as the mining outlook may improve for India, but could lead to serious problems for nations that rely on the use of Indian ore for the production of steel.
The steel industry in India may be the reason for a continued growth that has occurred within the country, but the sector is beginning to increase pressure on the mining companies due to the declining domestic supply of iron ore, according to Metal Miner.
Mining and commodity exports have been declining, and with this new development, the numbers could decrease further. World production of iron ore fell 6.2 percent in 2009, leading to a 8.1 percent drop in the amount of crude steel that was produced in the same year, according to the United Nations Conference on Trade and Development.
While the rest of the world may be affected by the drop in exports by India, the country may be able to surpass other nations in the production of steel, as it currently ranks fifth in total capacity, Metal Miner reported.
"Indian exports are in a structural decline as resource nationalism becomes a bigger driver behind policy," Graeme Train, commodity analyst at Macquarie in Shanghai, told Reuters. "The policy is definitely not encouraging exports."
Total exports for the country fell 17 percent to 97.6 million tons in the year to March, as these numbers were influenced by rising freight rates and export taxes. The commodity price trends were also influenced by booming Chinese demand that had let to a significant rise in value, according to the news source.
Analysts within the industry have noted that if the Indian supplies of Iron ore continue to diminish, there could be an increase in exploration trends in other areas of the world. The lack of exports in one area will likely lead to another country moving to fill the void, reported Reuters.
Countries like Australia and Brazil may have to step up their mining of iron ores to fill the demand that China is currently displaying, the news source reported.