NMDC cuts May iron ore price by up to 11% on weak demand

The company has also cut high-grade iron ore (lumps) prices by 4% to encourage domestic steel mills to procure the raw material from it

Government-owned mining major NMDC has cut iron ore prices of fines (with low Fe content) 11 per cent for May to align its prices with global markets. The company has also cut high-grade iron ore (lumps) prices by four per cent to encourage domestic steel mills to procure the raw material from it.

With this revision, iron ore fine is now quoted at Rs 1,660 a tonne, compared to Rs 1,860 a tonne last month. Similarly, iron ore lump is being sold at Rs 2,000 a tonne effective May 4, against Rs 2,100 a tonne earlier.

Over the past few months, NMDC has maintained high prices but demand has slumped recently, resulting in large inventories at mine heads in Odisha. Production obstruction in Karnataka, meanwhile, has resulted in lower availability. “NMDC’s cut in prices can be attributed to weak demand and abundance of supply in domestic markets. The company maintained higher price for several months, though,” said Tarang Bhanushali, an analyst with India Infoline.

The latest price revision shows a marginal increase so far this calendar year from the January level of Rs 1,560 a tonne of fines and Rs 1,800 a tonne of lumps, reflecting the global trend.

The benchmark iron ore prices for delivery in China slumped by 9.28 per cent in April to end the month at $60.09 a tonne. Demand from the steel and palate industry is weak and there is a huge stock of ore at pit heads of 140 million tonnes (mt), which seems to have forced NMDC to cut prices when global prices are rising.