NMDC, a state owned and India’s largest Iron ore miner, has raised Iron ore offers by INR 200/MT for Dec 2013. The miner has an installed capacity of 32 MnT pa and produces about 27-28 MnT.
The company revises Iron ore prices on a monthly basis. This is the 2nd time that NMDC has been able to lift offers in Q3 FY14. In October, offers had increased by INR 100/MT, after a year’s time.
On what grounds is NMDC charging high for Iron ore?
- For December bookings, miners in Odisha increased offers amid low output and better buying volumes.
- NMDC’s Iron ore production (2.56 MnT) and sales (2.44 MnT) increased M-o-M in November 2013. In October, it produced 1.9 MnT and sold 2.26 MnT. In November, numbers were lower than expected because of unavailability of required number of rakes, issues with equipment, loading problems and impact of post monsoon”, said sources.
- Sponge iron market is looking up because of shortage of Scrap in domestic market and landed cost of imported Scrap is still high. INR is at 62 against USD, pushing up domestic prices of Sponge iron and Scrap.
What CGSIMA has to say?
“Our cost of production has gone up by INR 500/MT because of NMDC’s Iron ore price rise. Therefore, Sponge iron makers will prefer to place bookings as per requirement only“, remarked President of Chhattisgarh Sponge Iron Manufacturers Association (CGSIMA).
Iron Pellet makers in Karnataka worry on expensive Ore
“Buying volumes in lumps might come down further in NMDC’s Iron ore e-auction in Karnataka because of price rise. Also, Pellet producers are likely to lift offers in the current month in line with high Iron ore prices“, said a Pellet manufacturer located in Karnataka.
On the other hand, Steelmakers in Karnataka cheer as the state government has requested Supreme Court to increase capped Iron ore output (at 30 MnT now) to 40 MnT. Sources said that Supreme Court’s hearing is expected to take place in the week ahead.
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