Vale SA, the world's biggest iron- ore producer, said India may play a bigger role in ensuring a "tight" future market for the steelmaking ingredient as it boosts infrastructure spending and becomes more urbanized.

India "could come to contribute in a relevant way to the heating up of the iron-ore market in the medium-term," Vale said. "We expect the iron-ore market to stay heated in the near future, given the lack of significant growth in supplies of high-quality iron ore and rising demand in China."

Vale said yesterday its third-quarter profit more than tripled, mostly because prices for the steelmaking raw material surged. China accounts for 46 percent of Vale's iron-ore and pellet sales, while Japan takes 10 percent, South Korea buys 4.8 percent and India and other Asian nations receive 3.7 percent.

The company based in Rio de Janeiro is boosting capacity at Carajas, the world's largest iron-ore mine, and may surpass OAO GMK Norilsk Nickel as the world's largest nickel company next year, Chief Executive Officer Roger Agnelli said Oct. 20.

Third-quarter profit climbed to $6.04 billion, or $1.13 a share, from $1.68 billion, or 31 cents, in the year-ago period, Vale said yesterday in a regulatory filing. The company was expected to post per-share profit of $1.03 on an adjusted basis, according to the average of 13 analysts in a Bloomberg survey.

Quarterly profit topped a previous record of $5.01 billion in the second quarter of 2008.

Eoin Treacy's view If China might have overinvested in infrastructure, India has underinvested. The pace of infrastructure development in India has been sclerotic with vested interests, corruption, bureaucracy and political insurrection delaying or cancelling necessary development. The additional complication of varying attitudes to development across neighbouring states has made the development that has occurred disjointed. This is a situation that will have to change if the country is to succeed in raising more of its population out of subsistence and into the middle classes.

CVRD is predicting India will be an increasingly important consumer of iron-ore. The Indian government are reportedly planning to double spending on infrastructure development larger in their 12th five-year plan. These are encouraging signs that India may finally be in a position to alleviate some of the bottlenecks that have acted as headwinds to growth in the past.

Sesa Goa is India's largest domestic iron-ore producer but will have to compete with cheap, high grade imports from the three major producers. This means it relies on a high price to remain competitive. The share fell from the April highs to range above INR300 and is currently pulling back from the upper side of the three-month range. A sustained move above INR400 will be required to indicate a return to medium-term demand dominance. Also see Comment of the Day on October 20th.