India’s largest government-owned merchant iron ore miner, NMDC, has cut iron ore prices for Aug’21 deliveries by INR 200-350/t ($3-5/t), SteelMint learnt from credible sources.
The revised offers by NMDC are as follows:
- Baila lump (6-40mm, Fe 65.5%) – INR 7,150/t (down by INR 300/t m-o-m)
- Baila fines (Fe 64%) – INR 6,160/t (down by INR 200/t m-o-m)
- DR CLO (10-40mm, Fe 67%) – INR 8,300/t (down by INR 350/t m-o-m)
- The above FoR prices are on per tonne basis, excluding royalty and other statutory taxes.
Factors behind decline in offers –
1. Drop in bids in OMC’s iron ore lump e-auction: State-owned commercial mining company Odisha Mining Corporation’s (OMC’s) e-auction for iron ore lumps on 31 Jul’21 received moderate participation, with 507,000 t of iron ore, or 74% of 687,000 t of the material on offer, getting booked. The bids in the auction edged lower by around INR 1,050/t against bid price of the last e-auction held on 2 June’21.
2. Decline in offers by Odisha’s private merchant miners: Decline in offers by Odisha’s leading private merchant miner, Essel Mining, lowered offers for iron ore by up to INR 2,000/t on 31 July. Prices of lump ore have moved down by INR 2,000/t and that of fines by INR 1,000/t, sources informed SteelMint. Odisha-based merchant iron ore miner Rungta Sons Pvt Ltd has slashed iron ore fines (Fe 62%) prices by INR 1,000/t ($13), sources informed SteelMint.
3. Global iron ore prices plunge: The spot price of iron ore Fe 62% fines dropped sharply by $14.5/t on 30 Jul’21 to $180.5/t CFR China tracking the decline in the iron ore futures market. Prices fell back to 2.5-month low amidst unclear market directions on Chinese steel production cuts and decline in iron ore futures.
The miner produced 3.06 million tonnes (mn t) of iron ore in Jul’21, up 40% as against 2.19 mn t in Jul’20, SteelMint learnt from the state-owned miner’s recent BSE disclosure. Out of the total volume produced in Jul’21, the miner recorded a major chunk of output from its Chhattisgarh mines at 2.08 mn t and the remaining 0.98 mn t from the Karnataka mines. The miner’s production from Chhattisgarh mines has gone up by 7% m-o-m.
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