ET Now In an interview with ET Now, Narendra Kothari, Former Chairman, NMDC shares his views about the Indian iron ore industry. Edited excerpts:
ET Now: After witnessing a 30% to 40% dip in prices in 2015, iron ore has been able to recover the loss in 2016. What do you think has triggered this kind of a rebound and a sharp one at that?
Narendra Kothari: It is a quite positive step which is going on at the moment. The prices in this month have gone from $55 to $70. Again, it is hovering around $65-$60. I hope the price will continue in between $60 to $70 around $63-$64 in times to come.
ET Now: Is the rally just a dead cat bounce or a sustainable one? Do you think iron ore will bounce back again to levels of $60?
Narendra Kothari: I hope that the price will remain between $60 to $65. Sometime occasionally it may go down to $60, but more or less it should stabilise between $60-$65, because new mines are coming and old mines which are expensive have closed down.
It should be balanced out. The demand projections which are there, I hope in next couple of months it will remain the same.
ET Now: Do you think iron ore and steel prices are directly correlated? A lot of experts are pegging the increase in iron ore prices to the rally and steel prices. What is your thought on the same?
Narendra Kothari: It is so. There is always a linkage, because iron ore is one of the major constitutes of steel price. In last few days we have seen a $4 to $5 increased in coal price.
Similarly, there may be not be a direct relationship there. But is a quite important factor for iron ore price.
ET Now: How do you view the Indian iron ore industry per se?
Narendra Kothari: With export duties going down, it will encourage the export of iron ore. The price which is going little more, say around $60-$65 is quite sustainable. Some places where logistics cost is very high, those people have little problem in mind. Otherwise, mines near the port base, they may be able to export. We have a lot of capacity in India.
Quite a good market is coming up and stable demand is there. Supply should be there. The price at the moment is quite acceptable to the market. Markets have accepted the prices and buying at those prices regularly.
ET Now: After witnessing a 30% to 40% dip in prices in 2015, iron ore has been able to recover the loss in 2016. What do you think has triggered this kind of a rebound and a sharp one at that?
Narendra Kothari: It is a quite positive step which is going on at the moment. The prices in this month have gone from $55 to $70. Again, it is hovering around $65-$60. I hope the price will continue in between $60 to $70 around $63-$64 in times to come.
ET Now: Is the rally just a dead cat bounce or a sustainable one? Do you think iron ore will bounce back again to levels of $60?
Narendra Kothari: I hope that the price will remain between $60 to $65. Sometime occasionally it may go down to $60, but more or less it should stabilise between $60-$65, because new mines are coming and old mines which are expensive have closed down.
It should be balanced out. The demand projections which are there, I hope in next couple of months it will remain the same.
ET Now: Do you think iron ore and steel prices are directly correlated? A lot of experts are pegging the increase in iron ore prices to the rally and steel prices. What is your thought on the same?
Narendra Kothari: It is so. There is always a linkage, because iron ore is one of the major constitutes of steel price. In last few days we have seen a $4 to $5 increased in coal price.
Similarly, there may be not be a direct relationship there. But is a quite important factor for iron ore price.
ET Now: How do you view the Indian iron ore industry per se?
Narendra Kothari: With export duties going down, it will encourage the export of iron ore. The price which is going little more, say around $60-$65 is quite sustainable. Some places where logistics cost is very high, those people have little problem in mind. Otherwise, mines near the port base, they may be able to export. We have a lot of capacity in India.
Quite a good market is coming up and stable demand is there. Supply should be there. The price at the moment is quite acceptable to the market. Markets have accepted the prices and buying at those prices regularly.
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