As per SteelMint analysis with reference to an Article posted early today, regarding expectations on NMDC's Iron ore price trend for August bookings, the state owned miner has lowered Iron ore lumps prices by Rs 200/MT (4.5%).
Whereas, fines prices remain unaltered at July levels.
NMDC is Nation's largest state controlled Iron ore miner with 30 MnTPA production capacity.
Price gap between NMDC's lumps and fines narrows down by 46.5% to Rs 1,690/MT in the current month, which was at Rs 3,160/MT in August '12.
NMDC's August Iron ore prices:
6-40 mm & Fe 65 Kirandul lumps Rs 4,200/MT, drop of Rs 200/MT
10-150 mm & Fe 64 Bacheli ROM Rs 3,630/MT, down by Rs 200/MT
Fe 64 Iron ore fines Rs 2,510/MT, Unchanged
Basic prices, excluding royalty and taxes
Now, the landed cost difference of Iron ore lumps purchased from NMDC (Rs 6,700/MT) and from miners based in the state of Odisha (Rs 6,000/MT) stands at Rs 700/MT in Chhattisgarh, which was about Rs 1,000-1,100/MT in the previous month.
Reasons as to why NMDC decided for the above price trend is similar to what SteelMint stated in the previous article.
When asked about NMDC's slightly cheaper lumps that would be available for August bookings, Sponge iron and Iron Pellet manufacturers located in Chhattisgarh and Karnataka respectively, said, ” A correction of Rs 200/MT in lumps is not going to help us in a big way to either improve our margins or to lower the cost of production.
Atleast, prices should have fallen by Rs 500/MT to call for any big change in buying sentiments.
We will not be able to increase the purchase volume in lumps by a large quantity, from NMDC's Karnataka e-auctions.
In the days ahead, Iron Pellet prices will be under pressure due to cheaper lumps being available.”
In Q1 FY 14, NMDC's Iron ore production was equal to what was produced in the same period last month.
Whereas, its sales increased by 6% to 7.3 million tonne (MnT) and Karnataka's contributed to about 30% of total quantity.
Off take in Iron ore improved by 3% from Chhattisgarh and by 14% from Karnataka.
For more details, contact
Seema Goenka
(seema@steelmint.com)
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