India: Will NMDC revise iron ore prices for Oct dispatches?

NMDC’s monthly revision for October 2022 is expected to come out next week, as per SteelMint sources.

Last month, India’s largest merchant iron ore mining company kept iron ore prices unchanged for September 2022 deliveries. NMDC fixed prices for lump iron ore (65.5%, 6-40mm) at INR 4,100/t, DR CLO (Fe 67%, 10-40mm) at INR 4,920/t and iron fines (64% – 10mm) at INR 2,910/t.

SteelMint started a new feature of predictive analysis a few months ago, where correlation between certain “predictors”/parameters/market or price influencers suggest an indication of future price movements of a particular commodity.

SteelMint has studied NMDC’s price data for the last five years to identify 21 parameters/ influencers which, it feels, are highly correlated, directly or indirectly, with its iron ore price movements.

The predicted price estimation is based on data metrics and co-relations that impact the company’s pricing decision such as domestic and global iron ore prices, prices of metallics as well as domestic semi-finished and finished steel.

In the current study, out of 12 parameters, 8 are reflecting a downtrend at present, three are showing positive and one remains unchanged. However, dispatches increased last month along with the hike in finished steel prices, factors which have kept the market looking up.

Factors impacting NMDC iron ore prices

• Odisha iron ore prices range-bound: SteelMint’s weekly Odisha iron ore fines index Fe 62% moved up by INR 100/t m-o-m to INR 3,500/t ex-mines while the Fe 63% lumps (Odisha) index remained stable at INR 6,950/t ex-mines, as assessed on 1 October. However, on a w-o-w basis, the indices remained stable for both Fe 62% fines and lumps.
• NMDC’s iron ore rake movement rises 15% m-o-m in Sep: Government-owned NMDC recorded iron ore rake movements from Chhattisgarh at 336 in September 2022, rising by 15% against 291 in August, according to data maintained with SteelMint. The figure includes movements within Chhattisgarh and to other state-based units but excludes supply to AM/NS India through slurry pipeline. Notably, a rake carries 3,850 tonnes (t) of iron ore.
• Primary mills hike steel prices for early Oct:  Indian primary mills have raised list prices of HRC, CRC and rebar by around INR 1,000/t for early October sales.
• Good Q3 steel demand prospects: The third quarter (Q3) is traditionally a good one from the construction demand perspective and hence mills are bracing for a good demand pull which will also support the price uptrend.