NMDC cuts high-grade ore price as demand falls

Domestic demand has dropped, tracking a global trend

NMDC Ltd, India's biggest iron-ore producer, cut the prices of some grades of the steelmaking ingredient for the third time in 2013 as domestic demand slumped. The shares declined.

The state-owned miner lowered the price of the high-grade lump ore by about seven per cent this month, Finance Director Swaminathan Thiagarajan said on Wednesday in a text message. Low-grade fines were unchanged from last month, he said.

Worst performer
The company, the worst performer on the S&P BSE Metal Index on Wednesday, fell by 4.4 per cent to Rs 130.20 at the close in Mumbai. The Metal Index fell 2.1 per cent.

NMDC, based in Hyderabad, has cut prices by more than 15 per cent since January as domestic demand fell, tracking a global trend. Benchmark prices in China dropped by nine per cent last month, according to The Steel Index.

Ore prices may fall to $100 a tonne in the third and fourth quarters next year, from $127 a tonne in the three months ending June, James Glenn and Rob Brooker, analysts at National Australia Bank Ltd said in a report on Wednesday. New mine supplies and slowing demand may push the price down below $100 a tonne, Bloomberg Industries analysts Kenneth Hoffman and Andrew Cosgrove wrote on March 28.