NMDC cuts iron ore rates by 11%

Steelmakers still dissatisfied, say prices back to Apr-Jun qtr levels

The local steelmakers were in for a surprise when NMDC, country’s largest iron ore miner and supplier to most steel and sponge iron makers, announced a cut in iron ore rates of upto 11%.

However, NMDC has decided to review prices every month now and not three-monthly as its earlier practice. This 2-11% cut is valid only for the month of October. Steelmakers, however, are not very amused by this move. An official from JSW Steel said, “NMDC increased prices by 8-13% in the last quarter when globally iron ore was getting cheaper. This reduction of 11% has just brought the prices back to the April-June quarter levels. There has to be a meaningful reduction in-line with the global rates.”

Iron ore rates have been on the downward spiral for the past few months and the slowdown in Chinese demand hasn’t helped prices as well.

An official from Essar Steel said that this price cut by NMDC was indeed a ‘good news’.

Steelmakers, however, are still skeptical on how much benefit they will be able to derive from this price cut as steel prices, too, are reeling under tremendous pressure.

Last month, steelmakers were forced to cut prices by 2-3% as the demand for steel is slow.

The JSW Steel official said that the government’s reform talk in the past few weeks is expected to turnaround the sentiment and the company is hoping for steel demand to pick up.

According to Joint Plant Committee, the real consumption of steel grew by 5.4% in the April-September period whereas the total steel production in this period rose by only 3.1%.

Steelmakers have been voicing their concerns against cheap imports in the country especially from FTA countries like Japan and Korea. In the April-September period, steel imports grew by 33.7%, to 3.8 million tonne.