Will NMDC Cut Iron Ore Prices in August?

1. JSW Steel increased iron ore purchases from Chhattisgarh mines significantly in July 
2. Iron ore dispatches to Vizag steel increased by 29% 
3. Chhattisgarh based sponge manufacturers reduced ore purchases
4. NMDC’s iron ore sales in Karanataka’s e-auction observed an uptrend

NMDC, India’s largest iron ore producer, has witnessed a significant increase in dispatches in July’15. Total 1.12 MnT iron ore has been dispatched from NMDC C.G. mines, which is about 60% increment as compared to June’15, according to railway movement tracked by SteelMint.

Iron ore procurement of JSW Steel, Dolvi, has significantly increased. It purchased 281,050 MT in the month of July’15; purchase was very less in June’15.

Vizag steel, a major buyer of NMDC’s Chhattisgarh iron ore, has also increased its purchases by 29% in July month. It loaded 512,050 MT against June which was about 396,500 MT.

Iron ore purchases by Chhattisgarh based sponge manufacturers has dropped down to 14% M-o-M. In July’15, dispatches from NMDC’s Chhattisgarh mines within the state was 0.20 MnT and 0.92 MnT to other states. It was 0.23 MnT within state and 0.47 MnT outside state in the month of June’15.

Essar Steel, a major buyer of NMDC’s iron ore, purchased 350,000 MT iron ore in July’15; whereas, it had purchased 360,000 MT iron ore in June’15. Essar Steel procures Fe 64% Iron ore fines from Chhattisgarh mines. The company has a slurry pipeline of 267 km from Chhattisgarh to Essar’s Vizag plant through which it pumps the material.

NMDC sold 1.5 MnT in Karnataka iron ore e-auction held in the month of July’15 which was 0.5 MnT in June’15. 

NMDC may cut lump prices and keep fines prices unchanged for August 

It has been anticipated that owing to lesser buying interest by C.G. based sponge manufacturers in the month of July’15, the company may correct lumps prices, keeping fines prices unchanged for August deliveries.

NMDC is the largest iron ore producer in the country with a production of 30.5 MnT in FY15 and expected to raise its production by 35 MnT in FY16.

NMDC Dispatches from C.G. & Karnataka

Note: Iron ore dispatches from Chhattisgarh are recorded from railway movement. Karnataka dispatches shown above are from e-auctions conducted by DMG.