No hike in iron ore prices by NMDC for current month
New Delhi: State-owned miner NMDC has kept prices of iron ore unchanged for the current month to ensure better sales and keep them in line with that in Odisha, even as global rates have escalated.
"The NMDC board met on February 2 and decided to keep the iron ore prices for both lumps and fines varieties of the raw material unchanged at previous month's level," said a source present at the meeting.
Incidentally, international prices of iron ore for lumps — the superior variety of key steel-making raw material — are ruling at around $148 (about Rs 7,800) a tonne, against just $87 per tonne in last September, mainly on high Chinese demand.
In contrast, NMDC is selling lump variety, which Indian steel makers use mostly, at Rs 5,080 per tonne.
The company has desisted from raising the price for current month following a reduction of Rs 320 per tonne in January, mainly to bring the parity with the available price in other iron ore mining states like Odisha.
"The other reason for maintaining status quo is to ensure more sales of lump ore as stocks were piling in the pitheads of NMDC's mines in the absence of buoyant demand from domestic steel makers," he said.
Domestic steel makers have been operating their plants at below capacity in the wake of poor demand by end-use industries such as construction, automobiles and fast moving consumer durables, among others.
NMDC has 32 million tonnes per annum iron ore production capacity at its mines in Chhattisgarh and Karnataka.
He said the price of fines variety, which bears low iron content, also left unchanged like in the previous month and this is again because NMDC's fines are a little expensive than what is available in Odisha.
NMDC had in January also decided to keep the price of fines unchanged at Rs 2,610 per tonne.
Company Chairman C S Verma had earlier said the company will take stock of demand-supply situation, international prices of the raw material and prevailing domestic prices before taking any call on the prices.
The company had raised the price of iron ore by 8-13 per cent for the July-September quarter when international prices were low. From this quarter, NMDC decided to revise prices of iron ore on a monthly basis.
In October, it reduced prices by 2-11 per cent and followed by 3-11 per cent cut in November. It however did not tweak prices in December, primarily to pacify steel makers which accused the state-owned firm of selling iron ore at a higher cost domestically and exporting at cheaper rates.