NMDC slashes iron ore prices by 5-10% for February

State-run NMDC has reduced iron ore prices by Rs 200-300 per tonne for the current month as weak global prices, which nosedived to five-and-a-half-year lows, are putting pressure on domestic rates.

"Our pricing committee has decided to reduce the price by 5-10% for the current month. The decision has been taken in a meeting on January 31," a senior company official said.

The country's largest producer of steelmaking raw material, NMDC rolled over the December price in January at Rs 4,200 per tonne for lumps and Rs 3,060 per tonne for fines.

In December, the PSU had reduced the price of lumps by Rs 200 per tonne and Rs 100 per tonne for fines.

NMDC reviews the price of its products every month. After holding the price of iron ore for July-October period, it had reduced the rate of lumps by Rs 200 per tonne for November.

The lumps variety contents more iron and are considered superior grade while fines are low-iron content variety.

Internationally, iron ore price tumbled to five-and-a-half-year low last week at just over $63 a tonne as a result of subdued demand from China.

Cashing in on the subdued price, domestic steel makers have already started importing iron ore in large quantities.

Buyers have been putting pressure on NMDC in recent times to reduce its prices. A leading steel producer reportedly alleged that the company was charging 40% higher than domestically available rates for the same grade of iron ore.

Besides, sales of NMDC were also not moving up as was expected. During the April-December period, NMDC's sales grew by just 8.19% to 22.83 million tonnes compared to 21.10 million tonnes in the corresponding period last fiscal.

This also put pressure on the prices front to improve its sales.