KOLKATA (Commodity Online): In 2010, iron ore prices in India are set to soar by around 15-20%. This is apart from the rise Indian witnessed in Dec 2009 when the iron ore prices jumped by around 30 per cent.

While the prices of iron ore with more than 64% ferrous content have already gone up from around $59-61 per tonne to $117 (free on board) per tonne, prices are expected to climb further by 15-20% in 2010.

Demand in spot is very high and this is expected to drive the long-term demand. Although in India there will be a marginal increase in demand, from around 85 million tonne to around 90 mt, China will drive the global demand growth with a demand increase of 11-12%. In fact, demand in the US, Japan and UK will remain stable but Chinese demand will continue to grow for the next five years at least at a rate above 10%, said market analysts.

Although China will drive the demand growth with its steel production expected to touch 565 mt in 2010, it will not be in a position to claim higher price cuts because there's been a control on pricing with the two mining giants BHP Billiton and Rio Tinto joining hands.

In fact, the Steel Index's benchmark price, which soared to $112 per tonne from $97 a tonne last week, clearly indicated that China's say in price negotiations with global miners has weakened.

Indian iron-ore fines were sold to China at a record $119-121 a tonne last week. NMDC, he said, would bank on the Chinese demand growth and their inability to claim big cut in prices.