NMDC cuts iron ore prices by up to 11% for Nov

State-owned iron ore producer NMDC has decided to cut iron ore prices by up to 11% for November, a development that would benefit steel producers.

Price of iron ore lumps would come down by 11%, while the iron ore fines prices will get reduced by 3%, a senior company official told PTI.

"Lumps availability were increasing, so we thought that we should rationalise the prices," the official said, adding that after the revision, "average price for lumps with 65% iron content will be about Rs 5,400 per tonnes."

Similarly, average price of fines, which have iron content of less than 60%, will now be at Rs 2,600 per tonne, the official said.

The iron ore producer, which has a 40% share in domestic market, had reduced prices by upto 11% last month also. However, then the price reduction was done mainly on iron ore fines.

NMDC's acting Chairman C S Verma confirmed the price reduction and said that for iron ore fines, the reduction is about three%.

He, however, declined to comment on the reduction in lumps prices by saying that minutes of the pricing committee meeting has not been finalised.

"Price of iron ore fines will be reduced by 3%. However, I can not comment on the lumps price as minutes have not been finalised yet," Verma, who is also SAIL chairman, told reporters here.

Iron ore lumps and fines are vital steel making raw material and most of the Indian steel makers use lumps for their operations.

The state-owned iron ore producer, which has a market share of about 40%, had cut the prices by 2 to 11% last month.

The two price revisions, of October and this month, have come after various domestic steel firms and industry associations had complained to the Steel Ministry of NMDC misusing its dominant position in the domestic market.

The iron ore producer was accused of charging higher prices for the domestic firms, while exporting at lower rates as it had hiked the prices by 8 to 13% for the July- September period, when international prices were down.

A nearly 15% fall in company's net profit as well as in sales during the last quarter can also be attributed to NMDC's decision to rationalise the prices, an analyst tracking the sector said.