India: NMDC hikes iron ore price by upto 5%

• NMDC raises iron ore fines price by INR 100/t ($1.4) and DR CLO by INR 290/t ($4)
• Bids for high-grade lump in NMDC’s recent auction increased by over INR 1,000/t against the base price
• Odisha’s Essel Mining raised iron ore lump offer by INR 500/t

India’s state-owned iron ore miner – National Mineral Development Corporation (NMDC) has announced price hike in iron ore, effective from today. Prices have increased up to 5% from its Chhattisgarh based mines. The miner has increased the price for Baila fines by INR 100/t, Baila lump by INR 250/t and DR-CLO by INR 290/t .

The revised prices for Baila fines (Fe 64%) stands at INR 4,310/t, Baila lump (Fe 65.5%) is assessed at INR 5,350/t and DR CLO (Fe 67%) at INR 6,210/t. NMDC sets prices on a free-on-road (FoR) basis and does not include royalty and taxes.

Factors driving price hike:

• DR-CLO lots in NMDC’s Chhattisgarh auction fetch aggressive participation – India’s largest iron ore miner – NMDC conducted iron ore e-auctions on 19th Mar’21 for 701,400t iron ore from its Chhattisgarh mines. Offered quantity consisted of 600,600 t of fines, 50,400 t DR-CLO and rest comprised of lump and ROM. The DR-CLO lots received a good response with the entire quantity booked and bids increased by around INR 1,100/t over the set base price of INR 5,965/t, as it is still cost-effective than other substitutes. Bids for lump moved up by around INR 300 over the set base price of INR 5,139/t, SteelMint learned. However, the fines lot fetched a weak response as only 58,000t was booked.
• Odisha’s Essel Mining raised iron ore lump offer by INR 500/t – Odisha’s Essel Mining has increased iron ore lump offers by INR 500/t this week, credible sources reported to SteelMint. Offer for lump (5-18 mm, Fe 62%) stands at INR 8,100/t (ex-mines, including Royalty, DMF & NMET). However, the miner has kept the fines offer unchanged. High-grade iron ore availability is limited in the market. Apart from few smaller merchant miners who have already exhausted their EC limit a few more merchant miners have kept their offers on hold due to pending dispatches of previous bookings and stacking concerns, sources reported to SteelMint.
• SAIL’s recent auction for high grade fines observes increased bids – Steel Authority of India Ltd (SAIL) conducted an auction from its Bolani mines in Odisha on 20 Mar’21. The entire offered quantity of 64,000 t iron ore fines (Fe 62.5%) received bids at INR 4,260-4,280/t (loaded, excluding Royalty). Bids have increased by around INR 500/t against the last auction held on 12th Feb’21 for a similar grade, SteelMint learned from sources.
• Price support in finished steel segment – Indian steel manufacturers are planning to raise flat steel prices in line with higher international prices, towards the end of March’21. factors driving price hike include higher realizations in flat steel exports, costlier imports and demand recovery in domestic market. In addition to it, few market sources are of the opinion that prices in the international markets may remain supported on the back of extended production curbs imposed in China’s Tangshan for rest of CY’21.