–NMDC increased iron ore prices from Chhattisgarh mines by INR 200-240/t w.e.f 30 Jun’20
–Domestic iron ore availability is expected to remain tight during monsoons
NMDC Ltd, India’s largest iron ore producer, has increased prices by 9-10% with effect from today, credible market sources told SteelMint.
Prices of Baila fines and lump was increased by INR 200/t while the price of DR CLO (calibrated lump ore) was raised by INR 240/t. Baila lump (Fe 65.5%) price has been set at INR 2,450/wet metric tonne (wmt), fines (Fe 64%) was set at INR 2,160/wmt and DR CLO (Fe 67%) price was at INR 2,850/wmt.
NMDC sets prices on a free-on-road (FoR) basis and does not include royalty and taxes.
NMDC had reduced iron ore prices by 17% each in April and May and left prices unchanged in June. Typically prices are set for the entire month, so the current prices could remain applicable through July.
Expectations of tighter iron ore supply in the monsoon season and low stocks with NMDC may have prompted the price hike. According to data maintained with SteelMint, NMDC has supplied 51 rakes to Chhattisgarh based units in Jun (till 29th). In the month of May’20, the figure was around 43 rakes.
Stocks of high-grade ore have tightened in Odisha as successful bidders of auctioned mining leases are yet to start production, supporting iron ore prices nationally. Some of the auctioned leases are tied up in litigation.
Bulk iron ore fines bookings in Odisha picked up ahead of the monsoons. Deals for Fe 63% Odisha fines were done at INR 1,800-1,900/t ex-mines last week.
Continued bullishness in the global iron ore market on robust China demand may have also prompted NMDC to lift prices, since Indian steel mills are unlikely to import ores at current prices. The monthly average price of Fe 62% fines CFR China increased by 10% to USD 103/MT in the 1-29 June period against an average of USD 94/MT in May. Uptick in Dalian Commodity Exchange iron ore futures and tightness in supplies from Vale are supporting global prices.
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