A sudden decline in international prices could be a game changer since the Chinese steel industry has sought government intervention after it complained that speculation, and not fundamentals, have driven up ore prices.

That apart, Union Minister for Road Transport and Highways Nitin Gadkari recently sought the Prime Minister Narendra Modi’s intervention in the near-55% hike in steel prices by companies over the last six months, making projects unviable.

This may limit the rally for iron ore industry which was able to pass on price hikes to steel makers till now, resulting in higher costs to buyers.

But Ritesh Shah, analyst at Investec, expects iron ore prices to remain firm for the next 2-3 months as Odisha production issues are unlikely to get resolved anytime soon and domestic iron ore prices will remain at a discount to global prices.

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