India to Consider Iron Ore Tax Cut If Prices Keep Falling

India will consider cutting export taxes on iron ore should prices of the key steelmaking ingredient extend declines from this week’s five-year low.

“If the prices continue to fall we’ll have to do something,” Steel Minister Narendra Singh Tomar said in New Delhi today. India charges a 30 percent duty on ore shipped overseas.

Iron ore prices will plummet to less than $60 a metric ton next year as global supply increases and demand remains weak, according to Citigroup Inc., which slashed its quarterly forecasts for 2015 by as much as 23 percent. The raw material will average $72 a ton in the first three months of 2015, down from an earlier forecast of $82, Citigroup’s Hong Kong-based analyst Ivan Szpakowski wrote in a report dated yesterday.

Ore with 62 percent content delivered to Qingdao rose 0.1 percent to $75.87 a dry ton yesterday, according to Metal Bulletin Ltd. The commodity slumped to $75.38 on Nov. 6, the lowest in five years.

The ministry is also looking into complaints by producers on rising steel imports, Tomar said. Exports from China, the world’s biggest producer of the alloy, more than doubled to 1.34 million tons in the six months started April 1 from a year ago, according to data from India’s steel ministry.

Imports are cutting profits at local producers, said Sanak Mishra, secretary general of the Indian Steel Association, a lobby group that complained about the issue.

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