China's steel producers are expected to feel the pinch, if the cost of iron ore increases as expected.
Flooding in Australia will reduce production there, and the Indian government is likely to raise export duties on the resource. Qi Tianxing has the story.
According to Indian media reports, India's steel ministry has mooted a 20 percent rise in duty on iron ore exports.
The move will definitely push up iron ore prices.
The Chinese steel market has already reacted to the news, with steel prices surging, even in the off season. Qiu Yuecheng, Spot Trader said "Currently the price of steel billet has risen by 100 yuan per ton from a week earlier." China's domestic steel prices have been on the rise since October last year.
Steel traders say if the export duty is raised by 20 percent, the price of iron ore from India may rise 15 US dollars per ton. Iron ore producers are reaping the rewards of increased prices.
BHP Billiton recorded a 125 percent increase in net profit for the first half of 2010. China imported 9 million tons of iron ore less than in 2009, but paid nearly 30 billion US dollars more.