NMDC cuts iron ore lumps prices by Rs 200/t for May

After keeping prices unchanged for two months, state-owned NMDC has slashed prices of iron ore lumps, considered high grade due to rich iron content, by Rs 200 per tonne in May due to continuing weak demand.

However, it has kept prices of iron ore fines, considered low grade, unchanged for the current month. The company decides on the prices of its products on a monthly basis.

After the changes, "the prices of lump ore for May is Rs 4,300 per tonne; prices of fines for May is Rs 2,910 per tonne", NMDC said in a filing to the BSE.

In March and April, the company had kept its prices unchanged while it had raised the rates of iron ore fines by Rs 100 per tonne in February.

Due to sluggish market conditions, NMDC has raised rates only thrice in about 18 months (since November, 2012), that too only marginally.

Prices of lump ore have risen by Rs 300 per tonne since then, while the rates of fines (or the low grade ore) have gone up by Rs 400 per tonne. For rest of the months, NMDC had either reduced prices or kept them unchanged.

The weak market conditions were reflecting in the prices of steel (the final product of iron ore) also as most of the manufacturers have kept them unchanged for the current month.

Meanwhile, NMDC in its filing also said that its production of iron ore stood at 2.44 million tonnes (MT) in April, same as it was in the corresponding month of 2013. Production at company's mines in Chhattisgarh and Karnataka were at 1.71 MT and 0.73 MT respectively, almost same as last year.

The company has a total production capacity of 32 MT per annum at its mines in Chhattisgarh and Karnataka.

However, despatches of iron ore increased by over 22% in last month to 2.97 MT, it added.

Shares of the company were trading at Rs 149.70 a piece on the BSE during the afternoon trade, down 1.67% from the previous close.