Tuesday, October 05,
After quarterly pricing norms came into effect, this is the first time that prices of Iron ore, valid for the October-December period this year, will be lowered.
The price cut is expected to benefit large domestic steel companies such as state-owned SAIL JSW and Essar Steel, which buy through contracts from the National Mineral Development Corporation.
However, the lowering of input costs is not likely to be transferred to final steel prices immediately. Steel makers have already announced a price hike of anywhere between Rs 1000 and 1,500 per tonne in the current month.
The fall in ore prices is mainly led by lower demand from China, which is one of the biggest buyers of ore in global market. International miners like BHP Billiton, Rio Tinto and Vale are believed to have firmed up deals with Asian steelmakers at prices lower by 10-11% than those prevailing in the July-September quarter.
The situation is in contrast to the beginning of the year when large companies had sought up to 90-100% hike in prices in line with prevailing high ore prices.
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