India: NMDC cuts iron ore prices by up to 15% for July

India’s largest merchant iron ore mining company NMDC has slashed prices of lump ore by up to INR 600/t and fines by INR 500/t, effective from 12 July, SteelMint learnt from credible sources. This is about 11-15% from the last price announcement which was made in June.

NMDC fixed prices for lump iron ore (65.5%, 6-40mm) at INR 3,900/t, DR CLO (Fe 67%, 10-40mm) at INR 4,680/t and iron fines (64% – 10mm) at INR 2,810/t with effect from today.

Reasons behind the price cut-

• NMDC’s iron ore sales fall in June: India’s top iron ore miner NMDC produced 2.57 mnt of the raw material in June 2022, down 20% m-o-m from 3.2 mnt in May. Production in April-June 2022 stood largely stable at 8.92 mnt compared to 8.89 mnt in the same period last year. Iron ore sales, too, fell by 28% m-o-m to 1.9 mnt in June.
• NMDC’s iron ore rake movement to Chhattisgarh falls 30% in June: Government-owned NMDC recorded iron ore rake movements from Chhattisgarh at 209 in June 2022, lower by 30% against 299 in May, according to data maintained with SteelMint. The figure include movements within Chhattisgarh and to other state-based units but exclude supply to AM/NS India through slurry pipeline. Notably, a rake carries 3,850 t of iron ore.
• Mills lower steel capacity utilization: Indian steel manufacturers have undertaken maintenance shutdowns/running under reduced capacities a couple of months ahead of the schedule because of slow demand in both overseas and domestic markets. Thus, Indian crude steel production may drop 10-15% this month.
• Mills cut list prices for early July sales: Indian steel majors announced their early-July sales list prices for finished flat steel products last week. Subsequent to the annoucement, prices of hot-rolled coils (HRCs) (IS2062, 2.5-8mm) stand at around INR 61,000-62,000/t exy-Mumbai basis, GST @ 18%. Prices across these products have been cut by INR 3,000-5,000/t ($38-63/t) for this month.
• Global iron ore prices fall by around $30 m-o-m: Chinese spot iron ore fines Fe 62% prices closed at $114.05/t, CNF China towards the last weekend, lower by $28 m-o-m. Prices have come down on growing fears of weakening demand for the raw material in top steel producer, China, where multiple cities are enforcing fresh Covid-19 curbs. Iron ore inventory at major Chinese ports stood at 128.3 mnt this week, increasing by 2.8 mnt as against 125.5 mnt a week ago, as per data maintained by SteelHome.

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