Export prices for India’s iron ore are expected to hit $90 a tonne - twice what they were last November. Current prices are around $84 a ton.
“The tone of the market has become bullish,” Mr R.K. Sharma, secretary general of the Federation of Indian Mineral Industries. Prices are currently about $84 a ton, he said.
The reason for the rise is China’s 4 trillion yuan stimulus plan which has increased spending on housing and railways and which has revived that country's steelmakers. Many of China's steel mills either cut output in the second half of 2008 or mothballed plants. Indian's iron exporters stand to gain as demand increases as a result of the stimulus and India’s iron-ore exporters in December rose 38 percent, the first gain in eight months.
In the year to 31 March 2008, India produced 160 million tons of iron ore. Two-thirds of the country's production goes to China.
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