As India embarks on an aggressive drive to become a manufacturing powerhouse and revamp its ailing infrastructure, Asia's third-largest economy may emerge as bright spot for iron ore demand.
"India comes up as an alternative buyer. It is a country growing in terms of steel and iron ore demand so that might be an area to keep an eye on," Annalisa Jeffries, associate editorial director for Asia metals at Platts, told CNBC on Friday.
The nation's potential growth could be the long-awaited catalyst to knock beleaguered iron ore prices out of their bear market.
Prices of the commodity, a vital ingredient for steelmaking, tumbled to $43.4 a ton this week, according to the Steel Index—the weakest reading on record. At blame were the usual suspects: excess supply as low-cost miners like BHP Billiton and Vale continue to churn out output and dwindling demand from China, the world's largest iron ore importer.
Even more gloom is looming over the horizon, with Fitch Ratings predicting more than 145 million metric tons of new supply next year, according to a statement on Thursday. Meanwhile, Jeffries warned prices could go below $40 next year based on pessimistic views from steel mills in China and traders.