NMDC to declare its May Iron ore prices on the 3rd

NMDC is to take a decision regarding its monthly Iron ore price revision for the month of May, on the 3rd (friday).

The state owned miner might continue to offer iron ore fines at Rs 2,610/MT (Basic, excluding royalty and taxes) on the couple of reasons that higher prices would not be accepted by market and both demand and sales for fines at prevailing prices, is doing good.

In e-auctions also, the miner is able to sell almost the total quantity of fines offered.

Whereas, Iron ore lumps prices is anticipated to be quoted at marginally lower level.

Current offers for 6-40 mm Kirandul lumps are standing at Rs 4,600/MT, after being reduced by Rs 350/MT (7.1%) on April 2.

And, 10-150 mm Bacheli ROM prices are at Rs 4,000/MT after being lowered by Rs 260/MT (6.1%) (Basic, excluding royalty and taxes).

Lumps prices are expected to turn down as after being pulled down twice in April and March (by 2.2% i.e. by Rs 110/MT to Rs 4,950/MT), demand has still not improved in large, though, it was some what better in April.

A couple of other factors are that customers are facing funds crunch as the industry is yet to perform well and domestic sponge iron ore prices have fallen by around Rs 600/MT in a week's time.

The landed cost of lumps from Odisha is in the range of Rs 7,500-7,800/MT (Fe% 63 material, including Royalty).

And that of NMDC, is about Rs 8,400/MT (Fe% 63/64 material, including Royalty, excluding VAT) as the material has to be directly loaded to Raipur, after crushing has not been allowed at Jagdalpur.

To reduce the gap (Rs 900/MT) in landed costs, which is an important factor considered by customers, cheaper lumps might be available, off take of which has been poor in e-auctions too.