India’s largest iron ore producer-National Mineral Development Corporation (NMDC) has raised iron ore prices w.e.f 04 Apr’16. This was the 2nd successive month that the miner has raised its prices. Prices of Baila lump and Baila fines moved up by INR 150/MT. While DR-CLO prices strengthened by INR 270/MT.
On the other hand Odisha merchant miners who are awaiting for stability in sponge iron prices are yet to take a call on iron ore prices. However market participants shared that there appears chances of lump prices going up by INR 100-150/MT. Also, in the recently published average sale price of Indian Bureau of Mines (IBM) iron ore royalty for Odisha lump (Fe 65% & above) has decreased from INR 526.2/MT to INR 380.3/MT. For Odisha fines (Fe 62% to below Fe 65%) iron ore royalty has reduced from INR 221.1/MT to INR 215.4/MT.
As per SteelMint analysis, Chhattisgarh based plants have procured around 11 MnT iron ore from Odisha merchant miners via rail & road movement in FY16. While in the same time frame, they have purchased around 2.7 MnT iron ore from NMDC Chhattisgarh mines through rake movement.
Below is the price comparison analysis of landed cost for a Chhattisgarh based plant for sourcing iron ore from Odisha and NMDC Chhattisgarh.
Landed cost of iron ore to a Chhattisgarh based plant from Odisha and NMDC (C.G.)
|
Particulars |
Odisha |
NMDC Chhattisgarh |
| Price of fines | 1,300 (ex-mines) | 1,860 (FoR price) |
| Grade (Fe %) | 63 | 64 |
| Loading charges | 300-350 | NA |
| CST @ 2% | 26 | NA |
| Royalty, DMF & NMET | Included | 351 |
| Rail freight to Chhattisgarh | 1,330 | 1,680 |
| Unloading charges | 50 | 50 |
| Grade Premium Adjustment | Nil | (-80) |
|
Total |
3,006-3,356 | 3,861 |
|
Local freight from siding to plant extra |
||
NA-Not Applicable
Source: SteelMint Research
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