India: NMDC Increases Iron Ore Price from Chhattisgarh Mines

Strong demand, tight supply amid monsoons and increased prices of pellet and semi-finished steel have pushed up domestic iron ore prices.

India’s largest iron ore miner – National Mineral Development Corporation (NMDC) has announced price revision today. The miner has increased Baila fines prices by INR 150/MT, lumps by INR 200/MT, ROM by INR 190/MT and DR-CLO by INR 370/MT.

Miner has increased Baila lump prices by INR 200/MT (USD 3) with effect from today. After a hike, prices have reached almost 3.5 years high as similar price levels were seen in Feb’15.
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Last month on 22nd Aug 2018 the miner had raised prices by INR 140-170/MT.

Which all factors have resulted in the surge in iron ore prices?

1. Less production amid monsoons- NMDC iron ore production for the month of July’18 recorded at 1.52 MnT, down 35% M-o-M against 2.34 MnT in June’18.

2. Pellet prices cross 4.5 years high – Raipur pellet prices have increased by around INR 1000/MT in a week’s time to INR 9500/MT as on 6th Sept. 2018 against INR 8500/MT a week ago Central India (Ex-Raipur) pellet offers have increased significantly for almost 4.5 years high.

3. Sponge prices hit the all-time high- P-DRI prices in Raipur have increased to all-time high to INR 25,200/MT as on 6th Sept’2018.

4. Price hike by Odisha based merchant miners – Odisha based merchant miners had increased prices by INR 600-700/MT in August and yesterday announced another hike of INR 500/MT. This has made Odisha iron ore prices to hover close to 6 years high.

5. Supportive finished steel prices- Major Indian steel mills have announced a price hike of INR 1000-2000/MT in flat steel and around INR 500-2000/MT in long steel for September. Healthy export bookings, costlier imports over currency depreciation, end of monsoon season are expected to boost demand in coming days.

6. Imported scrap prices move up – Imported scrap prices to India have climbed to a month high and are hovering around USD 360-365/MT, CFR Nhava Sheva for containerized Shredded. Limited offers and currency depreciation have turned imports costly.

NMDC (C.G.) iron ore prices-

F.O.R prices in INR/MT w.e.f today
Royalty, DMF, NMET and other taxes extra
Source: SteelMint Research