NMDC has increased prices for lump and fines by INR 300-350/t each with immediate effect, the second time prices have been hiked this month, sources told Steelmint.
NMDC had last raised prices for lump and fines by Rs 200/t each on 31 July. Baila lump (Fe 65.5%) price had been set at INR 2,650/wet metric tonne (wmt) and fines (Fe 64%) were set at INR 2,360/wmt on that date. NMDC sets prices on a free-on-road (FoR) basis and does not include royalty and taxes.
Iron ore prices have risen on the back of lower supplies (especially lumps) from the key producing state of Odisha and an uptick in demand from steel producers.
Odisha’s iron ore production has been hit by continued suspension of mining at 14 of the 19 newly auctioned mines in the state. These mines accounted for 40-45mn t output in FY’20. Output has also slowed from mines which had not come up for auction and fewer tonnes offered by previous leaseholders of auctioned mines, industry sources had earlier told Steelmint.
Private miners such as Essel Mining and state-owned OMC have sold iron ore at higher prices over the past couple of weeks.
Monsoon rains and localized lockdown/social distancing measures have also affected logistics and mining operations in Odisha and other iron ore producing states.
Demand has, however, increased from mills as export and domestic prices of downstream products such as billet, DRI, iron ore pellet and HRC have risen since early July. With economic activity likely to inch further towards normalcy, price and demand gains of downstream sectors are likely to be sustained in the near-term.
NMDC posted y-o-y increase in sales and output by 7% and 13% at 2.19mn t and 2.57mn t respectively in Jul’20.
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