NMDC likely to raise iron ore prices for Feb

After reducing the prices of iron ore for domestic steel mills in the October-January period, state-owned miner NMDC is considering a price rise in February.

The company’s board is likely to meet next week to decide on the issue. “The company has taken a policy decision to revise iron ore prices every month. In line with the policy, the board would meet early next week,” sources said.

They added the rise could be between Rs 200 and Rs 400 a tonne and. It would be based on factors such as demand and supply, prices elsewhere and the recent rise in international prices, they said. In the past two months, prices of iron ore in the international markets have risen significantly. Currently, it is traded at $140-145 a tonne, about 61 per cent higher than in September.

 

NMDC was criticised for increasing prices in the July-September quarter. Following this, it had decided to revise the prices monthly. In October, it had cut prices 2-11 per cent and in November by 3-11 per cent. In December, it had kept these unchanged.

For January, NMDC had cut the price of iron ore lumps 5.9 per cent, or Rs 320 a tonne. Prices of fines, however, were left unchanged. Currently, NMDC sells fines from the Bailadila mines (with 64 per cent iron content) at Rs 2,610 a tonne, while lumps are priced at Rs 5,065-5,100 a tonne, excluding royalty.

Miners in Odisha are selling fines (with 63 per cent iron content) at Rs 2,300-2,400 a tonne, including royalty, while those from NMDC cost Rs 2,900 a tonne (including royalty). “NMDC ore is much better compared to that from miners elsewhere in the country. We have many advantages to offer, including logistics. Our ore will definitely cost more for February,” said an NDMC source.

In January, NMDC dispatched 1.3 million tonnes (mt) of iron ore fines from its Bailadila mines, compared with one mt in December. It also dispatched 6,00,000 tonnes of lumps, compared with 4,00,000 tonnes in December.

However, the company continues to face logistical problems in Karnataka and is unable to produce one mt a month, as directed by the Supreme Court. Also, its dispatches from the Donimalai mines in Karnataka’s Bellary district are low. Currently, it has unsold lump stocks of 3,00,000 tonnes from e-auctions.