India: NMDC likely to cut Iron Ore Prices for Feb’15 – Sources

Due to falling Iron ore prices in Odisha by merchant miners, India’s largest and state owned miner, NMDC may be compelled to cut its prices for February deliveries.

Iron ore prices in Odisha have been corrected by upto INR 700/MT (USD 11.5/MT) in the month of January by major miners like Rungta and Serajuddin. Recently, these miners have received mining permission of additional 16 MnT (Serajuddin- 10 MnT and Rungta- 6 MnT).

Also, the Odisha government has set a target for these miners to dispatch certain quantity during Jan’15-Mar’15 in order to maintain state royalty revenue, which is the prime reason for declining Iron ore prices in Odisha.

Sponge Manufacturers prefer Pellets over Iron ore 

Sponge iron manufacturers based in Eastern region prefer Pellet over Iron ore owing to easy availability and better price realization.

For producing Sponge from Pellet, it cost around INR 18,000-18,300/MT. Whereas, for making Sponge from Iron ore, the cost is estimated to be around INR 20,800-21,500/MT. Selling price of Pellet sponge (P-DRI) is INR 18,000/MT and Sponge iron (C-DRI) is INR 19,500-20,000/MT.

Cost of Making Sponge to Sponge manufacturer based in Raipur (Chattisgarh) is around INR 17,500/MT.