NMDC hikes iron ore prices by 8-13%

Iron ore miner NMDC has increased the contract price of key steel-making raw material by 8-13% for the July-September period to cash in on the current demand-supply mismatch scenario in the market.

"The NMDC Board, which met today, has decided to increase the contract price for the July-September by 8% for fines and 13% for lumps," a source, who was present at the meeting, told PTI.

NMDC has raised prices of raw material for the second consecutive quarterin this fiscal.

During the last quarter, it had raised iron ore prices by 8-10% on increased demand and lower availability.

Following the hike, price of lumps with 65% iron content has gone up to Rs 6,100 a tonne and up to Rs 3,000 a tonne for fines containing lesser iron.

Indian steel mills mostly use lumps.

NMDC is the country's largest iron ore producer. It has over 40% share of the domestic market.

JSW Steel and Essar Steel are NMDC's leading customers in the country.

NMDC had lowered the iron ore price by up to Rs 160 per tonne for lumps and Rs 600 for fines in the last quarter of 2011-12 fiscal, after hiking the price in the previous quarter.

The source said that despite it being a lean period for the construction activity during the current monsoon season, the demand for steel saw no signs of abatement, resulting in the spike in demand for iron ore.

"Price is a factor of demand and supply," the source said when asked the rationale behind the steep hike.

A ban on mining in Karnataka for over a year now and the closure of some mines in Goa, Odisha and Jharkhand have impacted iron ore production.

Total domestic production has come down to 169 million tonne last fiscal.

Industry body FIMI expects it to reduce further to 140 million tonne in the current financial year.

Steel majors had recently accused NMDC of charging higher prices for the domestic firms, while exporting at lower rates.

The company, however, said, "Who says NMDC is charging higher price here than the international price? If the price is higher here, they can buy from outside."