Wednesday, October 20,
The country’s largest Iron ore producer, NMDC, today said it will seek up to a 100 per cent jump in prices for supply of Iron ore to Japanese and South Korean steel mills for the current quarter over the previous contractual rates.
“We will seek a 90-100 per cent jump in the prices at which we supply Iron ore to Japanese and South Korean customers. As of now, we are looking to enter into supply contracts for the first quarter only,” said, NMDC Chairman Rana Som .
The company had last year entered into pact to supply Iron ore lumps to these mills at around $71 a tonne and iron fines at $61 a tonne for the 2009-10 financial year.
With the sharp increase in the spot Iron ore prices, the company aims to seal a deal at almost double the last year’s contracted rates.
Mr. Som also said the company will follow the prevalent global practice and look to enter into quarterly supply contracts with these global mills. The miner exports about 3 million tonnes of its produce to these two countries annually. It mines about 28 million tonnes of Iron ore per annum.
The supply pact between NMDC and Japanese and South Korean mills acts as benchmark for similar arrangements between the miner and domestic steel firms like Essar Steel and JSW Steel.
If the company succeeds in getting double rates for its Iron ore as compared to last fiscal’s contracted prices, it may seek quarterly pacts with Indian firms at the benchmark price.
Source: Business Standard
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