Orissa, India’s biggest iron ore producer, has put through a proposal to the central government to place a ban on exports in order to protect its domestic market, according to Reuters. If the proposal goes through, China which gets about 100 million tons from Indian annually, will be the country hardest hit.The state government has asked Orissa, which is state owned, to keep 70% of its iron ore lumps and 80% of its chromite ore for local use, according to The Economics Times. The state of Karnataka also banned exports in July last year to deter illegal mining.
China relied on India for about 20% of its iron ore imports in May which dropped to 6.4% after the Karnataka ban according to China Daily.
Global prices have already been affected by a dip in coking coal supplies from Australia. Floods in Australia have cut 5%, or about 14 million tons, of global coking coal supplies, according to Reuters.
Iron ore costs have more than doubled in the last two years because of rising demand in India and China. Prices in China are now expected to soar an additional 7% this quarter according to Bloomberg.