- NMDC cuts INR 600/t in fines and INR 700/t in DRCLO
- Company’s Jan’21 production was highest ever since inception
- Indian steel prices fall on sluggish sales
India’s state-owned iron ore miner – National Mineral Development Corporation (NMDC) has announced price cuts in iron ore for Feb’21. Prices have decreased up to 12% from its Chhattisgarh based mines This is the first time in the last nine-months that company has decreased iron ore prices amid falling pellet and semi-finished prices from the quite few weeks. The miner has reduced the price for Baila fines and lump by around INR 600/t and INR 700/t for DR CLO. Last month, company’s fines had already hit an all-time high while lumps hit an eight-year high.
The revised prices for Baila fines (Fe 64%) stands at INR 4,210/t, Baila lump (Fe 65.5%) is assessed at INR 5,100/t and DR CLO (Fe 67%) at INR 5,920/t. NMDC sets prices on a free-on-road (FoR) basis and does not include royalty and taxes.
Reasons behind cut in prices –
- Odisha iron ore prices fell on improved supplies–Towards the end of last week Odisha’s Essel Mining cut iron ore lump offers by INR 600/t and that of fines by INR 500/t. Limited buying inquiries at previous offers, improved iron ore availability in Odisha and has resulted in the price correction. Odisha’s state-owned miner- Odisha Mining Corporation (OMC) had scheduled iron ore e-auction on 01st Feb’21 for 933,000 t iron ore lumps. Although the entire quantity put to auction was booked however, bids fell by up to INR 2,200/t against the last e-auction conducted on 2nd Dec’20.Odisha’s iron ore production increased by 10% m-o-m to 11.4 mn t in Dec’20
- Limited participation in recently conducted NMDC’s auction – NMDC conducted iron ore e-auctions on 28 Jan’21 for 701,400t iron ore from its Chhattisgarh mines. Offered quantity comprised of 600,000 t of fines, 50,400 t DR CLO and rest comprised of lump and ROM. The DR-CLO lots received a good response and bids increased by around INR 1,300/t over the set base price, as it is still cost-effective than other substitutes. However, the fines lot received a weak response with just two rakes getting booked at base price, sources reported to SteelMint.
- Pellet index down in Raipur by around INR 700/t m-o-m –SteelMint’s domestic pellet price index has decreased sharply last week by INR 700/t m-o-m to INR 11,600/t DAP Raipur owing to price cut announced by Raipur pellet maker by INR 700-800/t.
- Sponge iron prices in Raipur fall to three-months low–Both the P-DRI and C-DRI Sponge iron (C-DRI) prices in Raipur have decreased around INR 3,200-3,600/t in a month’s time to INR 22,900/t and INR 23,700/t respectively exw Raipur. Prices have dropped to three-months low as similar levels were seen in early Nov’20.
- Global iron ore prices plunge by $16/t m-o-m –Spot iron ore Fe 62% fines price declined by $16 on monthly basis to $156/t CFR China, amid sluggish demand ahead of Chinese new year holidays.
- Indian steel prices fall on sluggish demand- India’s domestic Hot Rolled Coil (HRC) prices have fallen further this week on rising inventories with traders and normalizing iron ore supplies. SteelMint’s benchmark prices for 2.5mm thickness HRC stands at INR 55,000-55,500 /t (exy-Mumbai), down by INR 250/t as compared to last week.
Vizag Steel has decreased finished long steel price by INR 1,000/t ($14) last week, sources have reported to SteelMint. The current offer for rebar (12 mm) stands at around INR 54,400/t and wire rod SAE 1008 (5.5 mm) at INR 52,300/t ex-Chennai, excluding GST. - NMDC’s Jan’21 production recorded highest ever since its inception –NMDC iron ore production recorded a highest ever production since its inception in Jan’21. It has reached this land mark achievement with 16.7% growth y-o-y to 3.86 mn t in Jan’21 against the 3.31 mn t in Jan’20 last year same month. Similarly, sales figure is the highest ever in Jan’21 with 3.74 mn t.
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